Mosaic has three months to refinance

The retailer, which owns Oasis and Karen Millen, has£400m of debt.

In statements attached to its accounts filed last week at Companies House, Mosaic revealed the standstill agreement between it and banker Kaupthing expires on May 31.

The documents also contain a declaration from auditor KPMG that several factors, including continued support from Kaupthing, will be crucial to the group’s future.

According to the notes Mosaic and Kaupthing have been locked in talks since October and since then several repayment and covenant deadlines have been waived by the bank.

Interest payments have instead been satisfied by the issue of PIK notes and capital repayments due in January have been added to the original loan.

Mosaic bosses hope that the sale of the Shoe Studio business will help to raise cash and have reportedly also received offers for womenswear chain Principles.

* Separately the Daily Telegraph reported today that Baugur’s auditors raised doubts about Icelandic investor Baugur’s financial viability in 2007.

The UK business of Baugur, which invested in House of Fraser, Debenhams and Mosaic, was put into administration this month. However auditors KPMG observed in 2007 that there was “material uncertainty which may cast significant doubt,” about Baugur UK’s ability to continue as a going concern. The auditor’s statement had not emerged earlier because of late filing of accounts by Baugur.