DIY retailer targeted by new investment technique
DIY retailer Focus has been targeted by an investment technique that succeeds when companies default on their loans.

The Daily Telegraph has reported today that investment bank Goldman Sachs has bought a 'specific tranche of Focus' debt'.

Quoting a source, the paper said that Goldman Sachs 'should reap significant dividends' as it believed that Focus was about to default on its debt, thus triggering the debt 'being converted into potentially lucrative equity'.

Focus, which is owned by private equity houses Apax Partners and Duke Street Capital, has total debts of£280 million, according to The Telegraph.

Retail Knowledge Bank puts Focus' annual sales at about£718.2 million a year, placing the business at number four in the UK DIY market behind B&Q, Homebase and Wickes.

A source close to Focus said: 'It is absolutely not the case that Focus is about to default on its debt. In fact, it is trading well within the limits agreed with its bank six months ago and is actually outperforming the market. It is reporting positive like-for-likes.'

However, the source added that Focus would be 'reviewing its finances' next year and that possibly this would be the time when Goldman Sachs would hope to make a return on its investment.

Topics