Arcadia owner Philip Green has reached an agreement with The Pensions Regulator in order to aid the restructure of the company.
The company has agreed to provide security for the schemes to the value of £210m which includes an additional £25m agreed with regulator. Green’s wife and Arcadia shareholder Christina has also agreed to a further voluntary contribution of £75m over three years plus an additional £25m, making a total of £100m.
The funding agreement has come hours before a vote on Wednesday, on the approval of a company voluntary arrangement (CVA), allowing the retailer to restructure and prevent administration. The vote will require 75% approval from its creditors.
The CVA would allow Arcadia to close at least 23 stores in the UK, and reduce the rent of up to 70%, giving a 20% stake to landlords in return.
A spokesperson for The Pensions Regulator said: “Following extensive discussions with the company, shareholders, the trustees of the pension schemes, the PPF and advisers, we are pleased that additional security has been agreed in support for the pension schemes which brings the total security value to £210m. This is in addition to agreed contributions of £100m to be paid to the schemes by Lady Green.
“Given this enhanced level of support, we now consider the updated CVA proposals are sufficient because they provide better protection for scheme members in these difficult circumstances. We recognise that the best support for any pension scheme is a trading employer and we feel the CVA proposals now provide the right balance between security for the pension schemes and the chance of sustainability for the company.”
Ian Grabiner, CEO of Arcadia added: “We hope that the landlords and other creditors will follow suit and we can get the company back on a strong footing in all the markets where we trade. We would like to thank everyone involved including our lenders, the trustees, TPR and PPF for all their hard work over the last few weeks.”
“The board would also like to thank all of our staff for their hard work and support during this challenging time.”
