Matalan founder Hargreaves clashes with lenders over chain’s future
Fashion retailer Matalan is facing a battle between its lenders and its founder over its ownership as a deadline for refinancing looms.
According to a report in Sky News, the retailer’s chairman John Hargreaves has proposed pumping tens of millions of pounds into the clothing firm.
Hargreaves is reportedly hoping to retain outright control of the company, which is approaching a deadline for refinancing £350m in debt.
It has been reported that City sources believe some of Matalan’s senior creditors are unlikely to be convinced by this proposal.
Some creditors will be eager for the chain to be put on the market, Sky News reported.
It was suggested the sum the family shareholders wanted to inject into the firm was between £25m and £50m.
According to Sky News’ sources, there has not been a formal discussion about a sale and lenders have not formally rejected Hargreaves’ proposals.
The retailer is bracing for a £350m bond repayment in January, with an additional £130m instrument is scheduled for repayment the year after.
Despite a rise in revenues, the company reduced its number of employees from 11,558 in 2021 to 10,837 in 2022, mostly across retail and distribution roles.
Matalan also secured a £60 million revolving credit facility for up to 18 months to further strengthen its balance sheet.
The Hargreaves family is being advised by Lazard, while Matalan’s senior lenders are being advised by Perella Weinberg Partners.
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