Matalan founder Hargreaves asks lenders for £50m cash injection

The founder of the fashion and homewares business is understood to have approached existing lenders Barclays and Lloyds to pump a combined £50m of government-backed funding into the retailer to prevent it running out of cash.

Fashion businesses have been hit particularly hard by the coronavirus lockdown, with retailers including Cath Kidston, Debenhams and Warehouse all entering administration over the last few weeks.

According to The Times, Hargreaves is reluctant to dip into his personal funds to help Matalan through the coronavirus pandemic. A Monaco-based tax exile, Hargreaves is understood to have amassed a £600m personal fortune.

When the coronavirus hit, Matalan selected advisers from Deloitte to help drum up emergency capital, but investors were wary of offering up cash due to Hargreaves’ reluctance to invest his own money.

A source close to Matalan told The Times that Hargreaves had offered to inject cash in some of the new financing options being considered.

Banks will only lend to Matalan under the Coronavirus Business Interruption Loan Scheme if they are the first in line for repayment should the business default.

It is a move that would require consent from bondholders, who have sought guidance from investment bank Perella Weinberg Partners and law firm Kirkland & Ellis.