The Body Shop to cut tax bill if it exits administration
Aurelius has drawn up the plans with restructuring advisers from FRP Advisory, ahead of a meeting with creditors
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Administrators for The Body Shop have been working on a deal to cut the firm’s tax bill should it emerge out of administration, according to reports from The Times.
The deal would allow the company to retain £66m worth of tax benefits it had before it fell into insolvency.
Creditors will benefit from the agreement as it could be used to lower corporation tax in the future, if the company can be saved.
The proposed deal would allow the retailer’s private equity owner Aurelius to give back more cash to creditors as a dividend.
Sources claimed the creditors would likely secure a dividend reflecting the value of the tax asset should they vote in favour of a company voluntary agreement.
It is believed that any potential CVA agreement will not lead to a meaningful cut in rents for landlords.
Aurelius has drawn up the plans with restructuring advisers from FRP Advisory, ahead of a meeting with creditors.
This comes after The Body Shop announced it was closing 75 more stores across the UK with 489 jobs set to be lost.
