Troubled cake chain Patisserie Valerie given until January to agree loan with main lenders

The owner of troubled cafe chain Patisserie Valerie has said it has won more time to strike a loan agreement with its principal lenders that will allow it to cover existing debt.

Patisserie Holdings originally had 45 days from 12 October to agree a loan facility with lenders, but that time period has now been extended to 18 January next year.

Patisserie's value had endured a turbulent few months after a £40m accounting black hole was discovered in October, leading to the suspension and resignation of chief financial officer Chris Marsh.

Chief executive Paul May stepped down with immediate effect at the end of last week, replaced by turnaround specialist Stephen Francis, the former chief executive of pork producer Tulip.

May's resignation comes after the company suspended its shares following the shock announcement. Johnson scrambled to find emergency funding to keep the bakery afloat, putting in £20m of his own money in a series of loans.

Investors voted through a rescue deal at the crunch meeting earlier this month, where Johnson was accused of spreading himself too thin.

He has reportedly agreed to give up some of his other directorships, of which he holds about 20, and forego his £60,000 annual salary in light of the scandal.

The company’s shares are currently frozen while it awaits the findings of investigative auditors from PricewaterhouseCoopers, which is attempting to determine the source of of the accounting discrepancy.

The cake shop could also face legal action from shareholders over the scandal.