House of Fraser insists CVA plans on track
House of Fraser has moved to address “inaccurate and unhelpful media speculation” over its planned rescue package.
The likes of The Guardian reported over the weekend that the department store chain’s future was hanging in the balance, as deadlock between its Chinese owner and lenders threatened to scupper its intention to propose a CVA in early June. “The CVA is a condition of a transaction which will see international retailer C.banner acquire 51% of House of Fraser from current parent company, Cenbest,” the retailer said.
“This is entirely consistent with the statement made on 2nd May. It also continues to be the case that this transaction will see the injection of significant fresh liquidity into the business. House of Fraser is in close dialogue with its lending banks who are supportive of the company’s plans and the transaction with C.banner is progressing as expected.”
C.Banner confirmed on 1st June, in an announcement to the Hong Kong stock exchange, that it had entered into subscription agreements for new shares in C.Banner of HK$1.3 billion (£124 million). “In addition, irrevocable undertakings have been signed by the majority shareholder in C.banner approving all elements of the proposed transaction. This funding is for the purchase of the 51% shares of House of Fraser Group as per the original announcement,” House of Fraser noted.
Frank Slevin, House of Fraser Chairman, comments: “We are on track with our plans to enter the proposed CVA agreement. The funding news from C.banner is another important milestone in this complex process. We continue to have very constructive talks with our banks and other stakeholders who are positive about the plans.”
Alex Williamson, CEO, adds: “If we are to deliver a sustainable, long-term business supported by new liquidity then we need to make difficult decisions about our underperforming legacy stores. I am conscious that inaccurate speculation only feeds the ongoing uncertainty for my colleagues in the business and I reassure them we will share further news when we have it.”
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