A vote counting mistake has put Mothercare’s CVA proposals at risk with only 73.3% of creditors voting for the plans.
The move which was narrowly rejected was a key part of the retailer’s restructuring plan as it sought a rent reduction from Children’s World, a subsidiary which houses 21 of its stores.
Contrary to the announcement made last week, that part of the vote did not meet the 75% required for the CVA plans to go through.
However, the vote for Mothercare to close 50 underperforming stores, including branches of the Early Learning Centre, did meet the 75% required.
The mistake was discovered by Mothercare’s advisor KPMG when it ‘scrutinised the voting returns relating to the CVA processes ahead of their formal filing with the High Court’.
Mothercare is now considering all options for the affected stores, including shutting the outlets, which employ 336 people.
Mothercare CEO Clive Whitley said: “KPMG have confirmed the votes relating to MUK and ELC CVA’s passed by a clear majority, however it is now clear that the CVA of Children’s World was not carried by creditors by a narrow margin.”
He continued, “This will neither unsettle the UK restructuring and refinancing nor jeopardise our future transformation plans, which are already underway.”
