HEADLAM has announced plans to enter administration after efforts to secure the future of the business failed to deliver a viable solution to its financial difficulties.
The flooring distributor said its board intends to appoint Will Wright, Chris Pole and Ryan Grant of Interpath as joint administrators after concluding that administration is now the only realistic option available.The move follows a strategic review launched in July, during which the company explored a range of measures aimed at stabilising its finances.
These included refinancing discussions, potential asset sales and other strategic initiatives designed to improve liquidity and support a wider business transformation programme.However, continuing challenges across the market, combined with ongoing trading losses, meant the company was unable to implement its recovery plans quickly enough.
Headlam said it has now fully utilised the funding available under its existing banking facilities, resulting in covenant breaches and leaving the business with limited options.The filing of a notice of intention to appoint administrators provides temporary protection while discussions with stakeholders continue. Unless circumstances change, administrators are expected to be formally appointed within the next five business days.A similar notice is also expected to be filed for subsidiary HFD Limited.
Headlam said its other subsidiary businesses are not affected by the action taken in relation to the parent company and HFD.As a consequence of the announcement, trading in Headlam’s shares on the London Stock Exchange has been suspended. The company requested the suspension of its listing on the Official List and the Main Market with effect from 7.30am.Headlam has been one of the UK’s largest distributors of floorcoverings for many years, supplying products to retailers, contractors and commercial customers across the country.
