CARD retailer Clinton Cards was put into administration yesterday after suspending the dealing of its shares.
The company, which has a shop in Bridge Street, Morpeth, was informed late on Tuesday that Barclays and Royal Bank of Scotland had sold its £35m loans to American Greetings, which has decided to enforce repayment.
Clinton Cards said in a statement released on Wednesday morning: “The company is not in breach of any financial covenant or repayment obligation under the facilities.
“However, it had been in receipt of temporary waivers for some technical breaches of default related to management changes and supplier related discussions.
“Whilst not party to the negotiations between the banks and American Greetings, based on its discussions with American Greetings, the board believed that, if the loan facilities were sold to American Greetings, American Greetings would enter into discussions with the company with regard to its ongoing support for the business and expected it to extend the waiver of the technical breaches of the loan agreement.
“However, having secured control of the debt, American Greetings immediately informed the board that it intended to enforce the loan against the company and the board has concluded that because it is unable to repay the loan it has no option but to concur with American Greetings proposal to place the company and its subsidiaries into administration.”
The statement went on to say, that following a strategic review, the board had recognised the need to restructure the businesses and had expected to review its business plans and strategy and had also intended to publish its interim management statement on Thursday.
It said: “Trading for the 14 weeks of the second half to date has continued to be difficult, with group like-for-like sales down by 3.5 percent, in line with the trend reported in the interim report and the board’s expectations.”