House of Fraser given breathing space prior to CVA vote
Lenders have given House of Fraser breathing space in advance of the Company Voluntary Arrangement (CVA) vote, set for Friday, 22 June.
Reports suggest that the troubled retail chain has been in discussions with HSBC and Industrial and Commercial Bank of China (ICBC), with an extension to a £125 million term loan (now due in Q4 of 2020) and a £100 million revolving credit facility agreed.
The agreement is conditional upon creditors passing the CVA plans at the forthcoming vote.
The plans, which are likely to result in the closure of 31 department stores, rent cuts on a further ten and the loss of around 6000 jobs, have not been universally well received. Landlords have threatened legal action against the retailer due to the financial hit they would take because of the rent cuts.
A cash injection of £70 million from C.Banner, the parent group of Hamleys, set to acquire a 51 per cent share in House of Fraser once the CVA has been approved, is another condition of the extension.
For it to be passed, the CVA requires the approval of at least 75 per cent of the retailer’s unsecured creditors.
A spokesperson for the organisation said: “A CVA is the only viable option for House of Fraser at this stage and we are confident, if approved, that this will secure a sustainable future for House of Fraser.”
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