CHIPS joint MD Don McCabe sent MCV a comprehensive statement addressing Chipsworld Ltd's application for a Company Voluntary Arrangement earlier today:
"In order to nullify the ravages of the 'credit crunch' and the recession which has hit the industry over the last 18 months, and to protect Chipsworld Ltd, the company has taken the step of instigating a Company Voluntary Arrangement.
"This will affect Chipsworld Ltd and company stores ONLY and DOES NOT affect CHIPS Franchise Ltd, any franchise store or www.chipsworld.co.uk.
"No store, which operates under the CHIPS banner, will close as a direct result of the CVA.
"Stores which NOT linked to this in anyway are: CHIPS Stockton, Stafford, Skipton, Hartlepool, Arnold, Lytham St Anne’s, Yeovil, Consett, Chester-Le-Street, Guisborough, Chorlton, Newcastle-Under-Lyme, Woodley, Ashford, Ormskirk, Dudley, Longton & Market Harborough.
"Chipsworld Ltd believes it has taken responsible action towards the situation which has arisen over the last 18 months and in order to protect its customers, suppliers, employees and itself it needed to act this autumn.
"The Joint Managing Directors of Chipsworld Ltd Don McCabe and Nik Agar have each invested almost 25 years and a substantial amount of money in building up the company.
"They intend to weather this storm and will do everything in their power to ensure Chipsworld Ltd continues to trade for another 25 years.
"Since suppliers have been aware of the situation we have been bowled over by the support offered and the esteem in which the company is held.
"During the last 18 months, Chipsworld Ltd had run up significant HMRC debts. Until now Chipsworld Ltd has had an informal arrangement to reduce these debts and this has been relatively successful.
"However, there does remain a debt outstanding and HMRC now wants this on a formal footing.
"This is the primary reason for instigating a Company Voluntary Arrangement.
"This Company Voluntary Arrangement effectively throws a protective legal framework round a company and gives viable companies time to repay all agreed debts within a given time-frame.
"A nominee is appointed and ensures a company operates within the strict legal timetable and that previous suppliers are repaid under the terms of the CVA.
"The implementation of the CVA should not affect internal or external customers of Chipsworld Ltd ongoing.
"Don McCabe and Nik Agar will continue to run Chipsworld Ltd and take all commercial decisions on a day-to-day basis within the CVA framework."