River Island remains “confident” of High Court approval of restructuring plan
Approval for River Island’s rescue plan now rests on a High Court judge’s ruling after the fashion retailer failed to secure the required level of support for the proposals from landlords and lenders.
Despite the setback, the company remains confident that the plan will be approved later this week..
River Island is seeking to close 33 of its 230 stores as part of the proposed restructuring. This also includes proposals to cut the rents on a further 71 shops, which could also be at risk of closure.
The rescue plan was put to the High Court last week and needed the approval of at least three quarters of River Island creditors to enable the retailer to unlock an emergency loan from its founders, the Lewis family,
Subscribe to TRBRiver Island had previously told creditors it will run out of funds by the end this month if the plan was rejected, which would mean it would be “unable to pay its debts as they fall due”.
According to The Telegraph, around 80% of the retailer’s creditors by value chose to support the plan, which was drawn up by advisers at PwC.
However, River Island failed to secure 75% of the vote in every individual class of creditor, with some landlords withholding support.
The proposals will be put forward to the High Court on Thursday when a formal decision on whether to approve the plan will be made.
A River Island spokesman told The Telegraph: “River Island circulated its proposals for restructuring plan to creditors on June 20. In combination with the company’s ongoing transformation strategy, the plan is a proactive measure to place the company on a firm footing.
“We have been having positive conversations with key stakeholders and we are confident that we will achieve the approval of the plan in the coming days.”
