Shareholders of UK leather producer Pittards have accepted a new restructuring plan which was proposed at an EGM held on May 10.

By the company’s own admission, Pittards has been through a tumultuous few months as debts from a £32m pension plan deficit together with challenging trading conditions and losses at their Leeds plant threatened to engulf the company.

Earlier this year the Leeds operation was closed and production of shoe and leathergoods leather was transferred to its Yeovil headquarters and the new Ethiopian facilities.

The restructuring plan includes entering into a Company Voluntary Arrangement (CVA) and pension fund liabilities are to be assumed by the Pension Protection Fund (PPF). CVA is an insolvency procedure which, if accepted by the creditors, can achieve a restructuring of a company’s balance sheet, allowing the company to continue trading.

According to managing director Stephen Boyd: ‘Entering CVA is a radical step but without doubt is the best way forward. The new restructuring plan is good news for everyone involved with the company.’

Pittards will now change its share structure and raise £2 million via a new issue. A statement issued by the company said ‘With their biggest order book for 10 years, a dedicated specialist workforce and the new restructuring plan endorsed by shareholders, the future for Pittards once again looks very good.’

Completion of the arrangements with the PPF remain conditional on a number of legal formalities which are expected to be fulfilled during the week commencing 15 May 2006.

Accordingly, it is expected that dealings in the New Ordinary Shares (as defined in the circular to shareholders dated 19 April 2006) will commence on AIM with effect from 22 May 2006.