Matalan bondholders want to debate about the future of the cheap retailer

Matalan bondholders want to debate about the future of the cheap retailer

Web Desk
June 12, 2022

Matalan bondholders want to debate about the future of the cheap retailer

Lenders to Matalan are gearing up for tense discussions regarding the chain’s future financing amid rising inflation.
Matalan’s senior bondholders are queuing up Perella Weinberg Partners to advise them on their alternatives.
Meanwhile, other junior lenders, who are owed some £80 million, are close to engaging Houlihan Lokey to advise them.

Lenders to Matalan, one of the UK’s largest budget shops, are gearing up for tense discussions regarding the chain’s future financing amid rising inflation and growing economic malaise.

With a £350 million repayment due early next year, it is learned that Matalan’s senior bondholders are queuing up Perella Weinberg Partners to advise them on their alternatives.

Meanwhile, other junior lenders, who are owed some £80 million, are close to engaging Houlihan Lokey to advise them.

On Friday, city sources suggested that discussions regarding refinancing Matalan’s financial sheet were expected to progress in the coming weeks.

They said that in order to keep sole control of the company, John Hargreaves, the company’s founder, will likely need to infuse tens of millions of pounds in new funding.

While the technical arrangements are still being worked out, the upcoming appointment of advisers to two sets of lenders highlights the importance of the summer talks.

Matalan is one of the largest privately-owned shops in the United Kingdom, employing around 10,000 people and running 230 locations in the United Kingdom as well as more than 50 in other countries through franchise agreements.

Mr. Hargreaves’ talks have been boosted by a court judgement in February that he must pay £135 million in taxes related to the sale of Matalan shares more than 20 years ago.

They also come as other cheap stores, such as Poundland’s parent firm, warn that as the cost-of-living crisis worsens, UK shoppers are cutting back on all but essential purchases.

Matalan declined to comment, but claimed in February that “the business retains a healthy cash and liquidity position following the period of excellent Christmas trading.”

“With respect to a prospective refinancing of its existing indebtedness, Matalan is continuing to investigate alternatives and watch market circumstances.”