Patisserie Valerie (LON: CAKE) has warned that it is on the brink of collapse.
In a statement to investors, the owner of the cafe chain said that it needs “an immediate injection of capital” to continue trading.
The statement released on Thursday said that in the past 24 hours it had “undertaken further investigation into the financial status of the company”.
The board has found “a material shortfall between the reported financial status and the current financial status of the business”.
“Without an immediate injection of capital, the directors are of the view that that is no scope for the business to continue trading in its current form.”
The group has said that its “professional advisers are assessing all options available to the business to keep it trading and will update the market in due course”.
Shares in Patisserie Valerie were suspended from trading on Wednesday after the discovery of potential fraud.
Luke Johnson, the chairman and owner of a 37% stake in the group, said on Wednesday: “We are all deeply concerned about this news and the potential impact on the business. We are determined to understand the full details of what has happened and will communicate these to investors and stakeholders as soon as possible.”
After the news, the group’s finance chief of the business, Chris Marsh, was suspended from his role.
In the group’s most recent results statement that was released in May, the firm said it had cash reserves of £28.8 million.
Patisserie Holdings has said it will update the market in due course.