Two of New Look’s biggest landlords are poised to vote against its crunch CVA today in a move that will throw the fashion retailer’s survival into doubt.
British Land and Landsec are both set to oppose New Look’s company voluntary arrangement, according to Sky News.
The property giants own 29 New Look stores between them.
Hammerson, which operates a host of major shopping centres including the Bullring in Birmingham and London’s Brent Cross, is also strongly considering voting against the CVA.
New Look has warned that it faces administration if its creditors do not vote in favour of its CVA today.
The fashion chain is pushing for a move to turnover-based rents – a proposal that sparked an angry response from the British Property Federation – but requires approval from 75% of its creditors.
New Look has more than 300 landlords across the UK, with British Land, Landsec and Hammerson accounting for less than 50 of its 490 shops.
Alongside the changes to rent payments, New Look is also proposing a further debt-for-equity swap. The move would reduce its debt pile from £500m to around £100m as it seeks to shore up its balance sheet.
A New Look spokeswoman said: “Our proposed CVA and consequential recapitalisation transaction, which involves a material reduction of debt, extension of the company’s banking facilities and a cash investment of £40m, represents the best outcome for all stakeholders, including employees, suppliers, landlords and all other creditors.
“Our landlords have given us valuable and constructive feedback since we initiated discussions in May regarding a required move to turnover rents.
“Our CVA proposal recognises this in a number of material changes we have made since our initial proposal, including enhanced landlord break clauses, unchanged service charges, minimum rent levels and an elevated ranking of leases.”
1 Reader's comment