Headlam Group (LON: HEAD), the UK’s largest floorcovering distributor, has appointed joint administrators after a strategic review launched on 1 September failed to resolve a severe liquidity shortfall.
The Board confirmed in an RNS statement earlier today that Will Wright, Chris Pole and Ryan Grant of restructuring firm Interpath Advisory have been appointed joint administrators to Headlam Group plc and its subsidiary HFD Limited.
Headlam shares have been suspended on the London Stock Exchange since 1 September, last trading at 10.5p, down sharply from a 52-week high of 68p and only just above the 52-week low of 4.64p. With trading halted, there is no fresh price move for the market to register against today’s news.
The Board said the scale of recent losses and the exhaustion of liquidity under existing facilities meant it could not carry out its planned transformation, leaving administration as the only route to statutory protection, a legal freeze that stops creditors seizing assets while the business restructures. The administrators intend to keep Headlam trading while negotiating a Company Voluntary Arrangement, a formal deal to repay creditors less or over more time, alongside a refinancing of existing debt and further cost cuts. Headlam’s existing lenders have indicated support for the plan.
Day-to-day management stays in place under the administrators’ direction, and the Group’s other trading subsidiaries are currently unaffected. Non-Executive Chairman Stephen Bird and independent non-executive director Nick Kelsall step down from the Board immediately, while current NED Wilf Walsh, formerly chief executive of Carpetright between 2014 and 2021, is lined up to become Non-Executive Chairman if the restructuring succeeds.
Headlam said it intends to seek restoration of its listing once the administration and restructuring are complete, alongside a reconstituted Board. Under UK insolvency rules, creditors and lenders rank ahead of shareholders in any recovery, so existing equity holders face the prospect of being left with little or nothing should the process proceed as outlined.