Administrators are searching for a buyer for Countrywide Farmers Group following the collapse of the proposed takeover of its retail business by Mole Valley Farmers after the CMA blocked the deal.

KPMG was appointed as the administrator for the farming supplies group on 7 March and is in the process of reviewing the circumstances the company faces.

There will be no immediate job losses or redundancies.

It has arranged an agreement with Hilco Capital to provide expert assistance with the running of the retail stores which are still operational, attempting to get the maximum trading benefits for creditors.

The financial restructuring company will also provide access to augmented stock channels while KPMG seek a buyer for all or part of the business, resulting in increased options for a managed process.

It is anticipated that Hilco Capital will be on hand to help matters for the duration of the administration process.

Over the course of the past year the board of Countrywide Farmers continued to review its financial position, and all of the options that are open for it, to protect the position of its 700 employees and 48 stores.

The group has already sold off its liquefied petroleum gas company to the DCC Group, in a deal completed on March 1, worth £28.75m.

Countrywide Farmers’ retail business which has come under pressure in recent times, due to the impact of the withdrawal of credit insurance cover, plus the tightening of supplier credit lines.

In April last year the board said it would explore the possibility of selling its retail division, which it hoped would be more of an attractive proposition having shaved its cost base and shut down loss making stores.

Eventually a deal was reached with Mole Valley Farmers to secure a sale of the business, but this was stopped in tracks by the Competition and Markets Authority.

This prompted the board to sell off the liquefied petroleum gas because of the time lag of this deal.

The Mole Valley Farmers deal was referred to the Competition and Markets Authorities for the more stringent phase two process. An announcement on the findings of this phase is due to be published by a deadline of August 20 this year.

As a result of the time period to come to a conclusion over phase two, the decision was taken to appoint KPMG as administrators, as the board did not feel able to meet its ongoing financial obligations.

 

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