Lenders Matalan, one of the UK’s biggest budget retailers, are bracing for tough negotiations over the chain’s future financing amid soaring inflation and economic turmoil. the gloom deepens.
Sky News has learned that Matalan’s senior bondholders are lined up for Perella Weinberg Partners to advise them on their options with a £350m repayment due early next year.
Meanwhile, many of the younger lenders, who are believed to be owed around £80m, have mostly appointed Houlihan Lokey to advise them.
City sources said Friday that talks on refinancing Matalan’s balance sheet are expected to get underway in the coming weeks.
John Hargreaves, the company’s founder, is likely to need to pour in tens of millions of pounds in additional funding to maintain complete control of the company, they added.
While details are yet to be finalized, the impending appointment of advisers to the two groups of lenders underscores the importance of negotiations that will take place over the summer.
Matalan is one of the UK’s largest privately owned retailers, employing around 10,000 people and operating 230 stores in the UK as well as more than 50 overseas through franchise agreements.
Negotiations involving Mr Hargreaves were further boosted by a legal ruling in February that he must pay £135m in tax in connection with the sale of his stake in Matalan more than 20 years ago.
They also come as other retailers at the lower end of the market, such as Poundland’s parent company, warn that UK consumers are limiting spending to all essential purchases as the crisis looms. cost of living escalated.
Matalan declined to comment, although he said in February: “After a period of strong Christmas trading, the business retains a strong cash position and liquidity position.
“Matalan is continuing to evaluate alternatives and monitor market conditions regarding its ability to refinance its outstanding debt.”
