DIY retailer Focus DIY intends to appoint accountants Ernst & Young as administrators, after breaching its banking covenants.
Focus owner Cerberus was understood to be trying to sort out a refinancing deal with restructuring firm GA Europe, according to Retail Week. However, the deadline for this is understood to have been set at 5pm today.
At 2pm, a notice was issued which stated that the directors has “come to the conclusion that to protect the interests of creditors they have no choice but to seek protection through filing a notice of intention to appoint administrators.”
The company is understood to have issued a notification of an event of default under the senior credit facility.
Creditors and staff are being informed this afternoon.
The company posted a pre-tax loss of £21m on turnover down 3% to £490m for the year ending February 21 2010 according to the latest set of filed accounts.
Focus DIY was founded by Bill Archer in 1987, with six stores in the Midlands and the north of England. The company now has 178 stores in England, Scotland and Wales, and employs more than 3,900 staff. Cerberus acquired Focus in 2007 for £1.