Creditors back CVAs for Wigan’s Grand Arcade

Administrators of Modus Properties (Wigan) and Modus (Wigan) have announced the approval of company voluntary arrangement proposals in respect of Wigan's Grand Arcade.

Mark Firmin and Richard Fleming from KPMG, the administrators of the shopping centre, said the CVA was initially proposed some weeks ago as part of an offer for the shopping centre from Jersey-based Redefine International, which also owns Delamere Place shopping centre in Crewe.

The offer comprised the making of funds available for distribution to both preferential and unsecured creditors through company voluntary arrangements for each company.

In order for this to come into effect, a CVA has to be approved by 75% of creditors and at a creditor's meeting held on Thursday the two CVAs were voted through by 100% of creditors.

Mark Firmin, partner at KPMG restructuring, said: "We are delighted that the CVA has been met with 100% approval from creditors. Our primary objective from the outset of this administration was to ensure the survival of the businesses as a going concern. Not only has this been achieved, but the creditors of the two companies will receive a higher dividend distribution than would otherwise be available."

"This also demonstrates the versatility of a CVA process. Not only is it a tool that can be used to restructure traditional retail and trading businesses; in this instance, we were able to find an elegant solution for a distressed property company which ultimately delivered maximum value."

The main shareholders of Modus Properties (Wigan) and Modus (Wigan), which owned and operated the Grand Arcade, are Brendan Flood with 40.5% and Martin Abramson with 44.5%.

Modus Properties (Wigan) and Modus (Wigan) went into administration in May last year owing insurance giant Aviva £123.4m.

The 450,000 sq ft Grand Arcade shopping centre opened in 2007. Tenants include Debenhams, Bhs, and Marks & Spencer.