The manufacturer also announced it had temporarily suspended trading on AIM (the Alternative Investment Market) for its ordinary shares, pending clarification of the company’s financial position.
Continued supply issues and cash constraints, as well as lower than predicted sales in November and December, prompted RGF’s board to explore ‘strategic options’ for its remaining business JF Renshaw.
The Board of JF Renshaw consequently resolved to appoint Interpath Advisory as its adviser to assist with the review of all strategic options, which included the sale of the shares or the business and assets of JF Renshaw as well as sourcing external funding.
While discussions over the sale are continuing, the board concluded that the likelihood of a solvent sale of the business and assets was very limited within a constrained timeframe.
“Given the impact of the current operating environment on the group, the group's limited working capital position and the consequential uncertainty regarding the group's financial position, the board and the JF Renshaw board have each concluded that it is required to take the necessary steps to preserve value for creditors,” said a spokesman.
“The board and the JF Renshaw board have each therefore filed a Notice of Intention to appoint administrators this afternoon, with a view to appointing Richard Harrison and Will Wright of Interpath Advisory as joint administrators of the Group within ten business days.”
RGF said the outcome for creditors of the group would be uncertain. However, given the circumstances, it believed the would be no return to shareholders whether via a solvent sale of JF Renshaw or any procedure in an administration.
Notice of RGF’s intent to appoint administrators comes less than a month (November 17) after it announced it had sold the business and certain assets of Rainbow Dust Colours to European Fermentation Products for a total cash consideration of £800,000.
Speaking at the time executive chair Mike Holt said: “We have made substantial progress over the last year. The radical reform programme has delivered significant benefits and recent senior management changes have also made a real difference.
“The group, however, is struggling to meet demand through supply issues and cash constraints. The board together with JF Renshaw is exploring all possible options and is working closely with Interpath Advisory to determine the best way forward.”
The group has seen a number of disposals in recent years in a bid to turnaround the business as it attempted to focus on its core offering – Brighter Foods to THG for £43m in 2021, Chantilly Patisserie for a cash consideration of £200,000 in 2019 and its Haydens, Garretts and R&W Scott subsidiaries in 2018 alone.