Clothing & Shoes

Matalan lenders eye up advisers amid talks over retailer’s future

It is thought that talks are set to take place over the summer

Matalan lenders are reportedly eyeing up appointing advisors ahead of talks about the retailer’s future financing in the face of current economic uncertainty caused by the cost of living crisis.

According to Sky News, Matalan’s senior bondholders are in talks with Perella Weinberg Partners to discuss options with them set to receive a payment of £350m early next year. The outlet also revealed that junior lenders, who are set to receive around £80m, are said to have appointed investment bankers Houlihan Lokey to advise them.

It also cited that sources close to the matter said that Matalan founder John Hargreaves may be forced to millions of pounds of additional funding in order to maintain control of the company. It is also thought that talks are set to take place over the summer.

At the start of the year Matalan reported its total revenues increased 19% to £291.4m for the 13 weeks ending 27 November 2021 (Q3), compared to £244.8m in the same period in 2021, meaning its total revenue has reached £777.9m from the previous total of £578.1m.

The company’s operating profits also increased by 370% from £7.4m to £34.8m in Q3, while pre-tax profits for all three quarters totalled £11m, which is up from a loss of £76.7m for the same period in 2020.

Matalan and Hargreaves have also been in the news after the founder lost a long-running court battle with HMRC as he attempts to avoid a tax bill that may reach up to £135m.

He has now been ordered to pay the tax bill after the Upper Tier Tribunal ruled he owes Capital Gains Tax in relation to the £231m disposal of his Matalan shares back in 2000.

Hargreaves, who founded Matalan in Preston in 1985, has been fighting the tax dispute for almost 20 years. It comes as Hargreaves argues he does not owe HMRC as at the time of the sale he did not consider himself a UK resident and instead was living in Monaco.

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