Publisher lays off 40 per cent of staff; negotiating with creditors to pay off debts
Mastertronic has filed for a company voluntary arrangement in an effort to clear its debts, Develop can reveal.
The CVA was formally sent to all the longstanding publisher’s creditors on July 25th. A creditors’ meeting will be held on August 11th to put the deal to a vote.
A CVA is an insolvency procedure that can be used by a a company that is insolvent or is strugging to pay its debts to pay creditors over a fixed period. Should credtiros agree, the firm can continue trading.
Mastetronic plans to close its Cambridgeshire HQ, exit all physical goods activity and will lay off 40 per cent of its staff.
The publisher’s CEO Andy Payne told Develop these were “testing times” for the company, but hoped that he hoped to keep the firm going moving forward as a digital business.
"To say these are testing times is an understatement, but I do feel confident of our creditors’ support and delivering against what we say we will do in an entirely digital world,” he said.
“Put it this way, If we were making something that was no longer in demand, or had the mainstay of our output suddenly made illegal or un-sellable, we would be hard pressed to convince anyone we could change direction and continue to trade. The only real option would be to close down. We could not take the CVA option, it just would not be allowed.
“However, the difference with us is that our digital business is extremely healthy, indeed the problem we have encountered has been caused by unexpected historic debts from the area we have exited. We have no problem trading in the future – it’s the past that is the issue.”
Payne has offered his own thoughts on the issue, which you can read here.