Lenders of Matalan, one of the UK’s largest discount retailers, are preparing for difficult talks over the chain’s future funding amid rising inflation and deepening economic gloom.
Sky News has learned that Matalan’s senior bondholders are hiring Perella Weinberg Partners to advise them on their options with a £350m repayment due early next year.
Meanwhile, younger lenders who are said to be owed around £80million are on the verge of appointing Houlihan Lokey to advise them.
City sources said on Friday talks to refinance Matalan’s balance sheet are expected to move forward in the coming weeks.
John Hargreaves, the company’s founder, will likely need to raise tens of millions of pounds in additional funds to retain full control of the company, they added.
While details are ongoing, the forthcoming appointment of advisors to two groups of lenders underscores the importance of the talks, which will take place over the summer.
Matalan is one of the UK’s largest privately owned retailers, employs around 10,000 people and operates 230 stores in the UK and over 50 overseas through franchise agreements.
Talks with Mr Hargreaves were given an additional boost by a court ruling in February that he will have to pay £135m in taxes in connection with his sale of shares in Matalan more than 20 years ago.
They also come as other retailers at the discount end of the market, like Poundland’s parent company, are warning that UK consumers are reining in spending on all but essential purchases as the cost of living crisis escalates.
Matalan declined to comment but said in February: “Following a period of robust Christmas trading, the company maintains a strong cash and liquidity position.
“Matalan continues to evaluate alternatives and monitor market conditions for a potential refinancing of its outstanding debt.”
Matalan bondholders seek talks on low-cost retailer’s future | business news
Source link Matalan bondholders seek talks on low-cost retailer’s future | business news