House of Fraser insists CVA plan ‘on track’

Reports over the weekend suggested that talks between the embattled chain and its banks had reached an impasse, threatening to derail its rescue bid.

But House of Fraser has launched a rebuttal of those claims and insisted lenders had been “supportive” of its plans.

House of Fraser needs the support of banks including HSBC and the Commercial Bank of China in order to launch its company voluntary arrangement (CVA), which could see it shut half of its 59 stores.

Reports over the weekend suggested that lenders had been spooked by uncertainty over a cash injection that has been promised by prospective new owner C.Banner.

The department store business plans to launch its CVA “in early June” as a condition of the transaction that would see C.Banner snap up a 51% stake in the company.

House of Fraser insisted it “continues to be the case” that the deal would result in “the injection of significant fresh liquidity into the business”.

And the retailer hit back at claims it had reached deadlock with lenders, claiming banks had been “supportive” and that talks were “progressing as expected”.

House of Fraser chairman Frank Slevin said: “We are on track with our plans to enter the proposed CVA agreement. The funding news from C.Banner is another important milestone in this complex process.

“We continue to have very constructive talks with our banks and other stakeholders who are positive about the plans.”

Further press speculation suggested that House of Fraser could shutter its Oxford Street flagship under the terms of a CVA, with the retailer’s banks said to be keen on selling the prized asset.

House of Fraser boss Alex Williamson said: “If we are to deliver a sustainable, long-term business supported by new liquidity then we need to make difficult decisions about our underperforming legacy stores.

“I am conscious that inaccurate speculation only feeds the ongoing uncertainty for my colleagues in the business and I reassure them we will share further news when we have it.”