Clinton Cards set to go into administration

Cards and party paraphernalia seller Clinton Cards said it expects one of its biggest suppliers to force it into administration on Wednesday.

The firm has requested its shares be suspended after US firm American Greetings bought £35m of Clinton Cards' debt from banks and called it in.

"Having secured control of the debt, American Greetings immediately informed the board that it intended to enforce the loan against the company," Clinton's said in a statement.

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"The board has concluded that because it is unable to repay the loan it has no option but to concur with American Greetings proposal to place the company and its subsidiaries into administration."

The firm said that was not in breach of any financial covenant or repayment obligation under the facilities.

However, it had been in receipt of temporary waivers for some technical breaches of default related to management changes and supplier related discussions.

"The board believed that, if the loan facilities were sold to American Greetings, American Greetings would enter into discussions with the company with regard to its ongoing support for the business and expected it to extend the waiver of the technical breaches of the loan agreement," Clinton said.

The struggling company has recently completed a strategic review and had been intending to publish its interim management statement on 10 May.

Trading for the 14 weeks of the second half to date had continued to be difficult, with group like-for-like sales down by 3.5%, in line with the trend reported in the interim report and the board's expectations.

In March, Clinton reported a loss of £3.7m for the six months to the end of January.