British Land and Landsec to oppose New Look’s CVA

New Look Store

New Look is facing opposition from some of its biggest landlords in a vote for its proposed company voluntary arrangement.

British Land, which owns 19 New Look stores, and Landsec, which owns 10 stores, will oppose the retailer’s CVA plans in a vote later today, according to Sky News reports.

The report also suggests that Hammerson, the owner of London’s Brent Cross shopping centre and Birmingham’s Bullring, is also leaning towards voting against the CVA.

The distressed young fashion chain claim that the CVA will enable a £40m new cash investment in the chain.

It is seeking to switch the majority of its store estate (402 stores) to turnover-based rents, with a further 68 stores to pay zero rent.

Upon completion of the deal, should it be successful, the company said it would lead to the following benefits:

  • Materially reduce its long-term debt at the operating companies from £550m to £100m of bank facilities with an extended tenor to 2024
  • Provide access to an operating facility of £70m to provide supplier and other working capital financing with an extended tenor to 2023
  • Remove the existing bonds of £440m in consideration for equity and a small shareholder loan which will have no cash debt service costs, leaving New Look’s cash interest burden substantially reduced by more than £30m per annum, and no bond debt at the operating entities including New Look Retailers Limited
  • Obtain a new cash investment of £40m into New Look to invest in the business and assist in fulfilling its long term strategy

A New Look spokesperson said: “Our proposed CVA and consequential recapitalisation transaction, which involves a material reduction of debt, extension of the company’s banking facilities and a cash investment of £40m represents the best outcome for all stakeholders, including employees, suppliers, landlords and all other creditors”.

Last week, it was reported Boohoo is once again reported to be eyeing up New Look as its next acquisition target.