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Matalan close to securing £50-mn funding from stakeholders
09 Jun '20
2 min read
Pic: Matalan
UK fashion and homewares retailer Matalan recently confirmed it is a step closer to securing £50 million in additional funding from existing stakeholders to tackle the impact of COVID-19. The funding comprises a £25-million revolving credit facility under a government scheme from two banks and £25 million from existing bondholders via a newly issued note.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) funding from the two banks will need to be paid back by December 31 this year, according to British media reports.
Banks will lend to Matalan under CLBLIS only if they will be among the first in line for repayment should the company heads towards bankruptcy.
In a statement, a spokesperson for the company said: “Matalan announced that it was assessing a number of alternative options to raise additional funding. This funding is required to enable Matalan to manage the short-to-medium-term cash flow impacts following the temporary loss of store revenue arising solely from the direct impacts of COVID-19.”
After being forced to shut its 232 stores in the United Kingdom, Matalan has deferred rent payments and offered to pay suppliers just 70 per cent of bills for April-July, with some landlords now launching legal action to reclaim money withheld by the business.
Matalan has since been permitted to re-open 15 stores across the country after the government relaxed non-essential retail rules to allow homewares stores to open from May 18.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) funding from the two banks will need to be paid back by December 31 this year, according to British media reports.
Banks will lend to Matalan under CLBLIS only if they will be among the first in line for repayment should the company heads towards bankruptcy.
In a statement, a spokesperson for the company said: “Matalan announced that it was assessing a number of alternative options to raise additional funding. This funding is required to enable Matalan to manage the short-to-medium-term cash flow impacts following the temporary loss of store revenue arising solely from the direct impacts of COVID-19.”
After being forced to shut its 232 stores in the United Kingdom, Matalan has deferred rent payments and offered to pay suppliers just 70 per cent of bills for April-July, with some landlords now launching legal action to reclaim money withheld by the business.
Matalan has since been permitted to re-open 15 stores across the country after the government relaxed non-essential retail rules to allow homewares stores to open from May 18.
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