Page last updated at 07:08 GMT, Tuesday, 29 September 2009 08:08 UK

Jessops agrees deal for survival

Jessops shop
Jessops says it will be able to continue as normal with this deal

Struggling camera retailer Jessops is undertaking a restructuring that it says will save the company.

It said that it would reorganise so that its biggest creditor, HSBC, owned 47% of the company, with the rest owned by pension and employee trusts.

HSBC will, in return, forgive £34m of debt that Jessops owes it.

Jessops said the restructuring would protect the about 2,000 employees of the company, and will allow it to compensate its current shareholders.

The company in its current form will be liquidated and that will allow £100,000 to be returned to shareholders - this is known as solvent liquidation.

"Thanks to the continued support of HSBC, the restructuring proposal will ensure that Jessops Group Limited remains a fundamentally strong business with a strong presence on the High Street," said Jessops chairman David Adams.

The deal would normally have to be approved by shareholders, but Jessops has obtained a waiver because without it the company could not survive much longer .

"Unless the proposal is completed the directors will have no choice other than to implement an insolvency procedure which will leave less value for creditors and no value for shareholders," Jessops said.

The shift to digital photography and the wider slowdown had hit Jessops hard.

By earlier this year, the firm had cut head office staff from 375 to 125 in less than two years.

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