Mothercare sets mid-May deadline for new funding
Mothercare is accelerating its attempt to find rescue financing with a target of mid-May to seal a deal, according to a news report at the weekend.
The struggling retailer has been working with the investment bank Rothschild to find alternative sources of finance apart from its current lenders, while KPMG is handling talks with those lenders (HSBC and Barclays) about its existing heavy deb load, The Telegraph reported.
The company reports its full-year results on May 17 and is believed to want to have a deal in place at that point. It said talks with lenders so far have been “constructive”.
But Mothercare's shares continue to hit rock bottom. They fell again on Friday by almost 7% to close at less than 18p each and continued to dip on Monday. That share price really illustrates the extent of the retailer’s decline. A year ago, it was as high as 132p and in July 2015 the shares were almost 284p each.
That's decline certainly justified Sainsbury's in not making a bid for the company – with recent rumours that it had considered taking it over – but the question still remains as to whether the retailer will be able to turn around its business in its current form.
Still-new CEO David Wood has a huge task on his hands and industry watchers continue to believe that a Company voluntary arrangement (CVA) is likely.
Copyright © 2022 FashionNetwork.com All rights reserved.