House of Fraser secures breathing space from lenders ahead of crunch vote
House of Fraser has secured significant breathing space from its lenders ahead of a crunch vote on store closures that will likely lead to the loss of 6,000 jobs.
Beatties in Wolverhampton and House of Fraser stores in Telford, Shrewsbury and Birmingham are all set for closure, with the loss of 1,250 jobs, if the rescue deal gets enough backing in Friday's vote.
Meanwhile, following discussions with HSBC and Industrial and Commercial Bank of China, the troubled department store has conditionally agreed an extension to a £125 million term loan and a £100 million revolving credit facility.
It is thought the extension of the loan will give House of Fraser more than a year to restructure and improve its trading performance. The loans will now fall due in the fourth quarter of 2020.
However, lenders will only approve the extension if landlords approve House of Fraser's restructuring plan, known as a Company Voluntary Agreement (CVA).
The loan extension is also conditional on House of Fraser receiving £70 million from Hamleys owner C.Banner, which is buying a 51 per cent stake in the business and injecting new capital.
Landlords have publicly hit out at the CVA, complaining that they are being forced to stomach a financial hit at the same time as House of Fraser enjoys new investment.
The CVA will lead to the closure of 31 stores, with rent cuts on a further 10, if it is approved by 75 per cent of House of Fraser's unsecured creditors.
