Carpetright secures £15m emergency funding
Embattled retailer Carpetright has secured a £15m lifeline as the group plots a path to firmer financial ground.
The under-pressure flooring retailer has been handed an unsecured £15m loan, with an 18pc interest rate and £2.25m arrangement fee, from major shareholder Meditor European Master Fund.
In a stock market announcement, the retailer said it would “assist the company with short-term working capital requirements.”
It marks the second time Carpetright has tapped the investor for finance after it was granted a £12.5m loan from Meditor on March 21.
The latest move is a precursor to a £60m rights issue set to be announced next week as it eyes a reprieve from the pressure on its finances.
Carpetright
Carpetright put 300 jobs at risk last month when it announced plans to close 81 stores when creditors overwhelmingly backed its restructuring plans.
It is pushing through the change as part of a company voluntary arrangement (CVA), which allows firms to shut loss-making stores and secure deep discounts on rents.
Rent on a further 113 sites will be slashed under the CVA.
The bitter weather at the start of the year has piled more pressure on the retail sector, which is already struggling with waning consumer confidence, the shift to online, and escalating costs.
Hikes to the National Living wage, inflation and rising taxes sparked by last year’s business rates revaluation have squeezed margins.
Discount retailer Poundworld and department store chain House of Fraser are among the retailers pursuing CVAs, while New Look has already made swingeing cuts through the restructuring process.
