Arcadia won't budge on CVA red lines as vote looms
There are concerns that Arcadia’s CVA proposal won’t get the support it needs as the giant fashion retail group refuses to shift its offer regarding its pension fund and any equity stake that its landlords might be entitled to, according to reports.
The company wants to cuts its pension fund contribution by half annually, to £25 million, with Sir Philip Green’s wife Tina (who’s also a key shareholder) injecting £100 million into the fund in the next three years.
But with a pension fund black hole many times that size, and the Pensions Regulator opposing the plan, it’s unclear whether the CVA will get through in a crucial vote next week if Arcadia won’t offer any more. Retail Week reported on Thursday that the company is digging in its heels having already offered an extra £185 million, based largely on property assets, after it quickly became clear that its initial plan wouldn’t be enough to win approval.
The retail sector trade magazine said that sources indicated the pension stakeholders remain unconvinced and that Arcadia won’t make any more concessions as it said pensioners would be unaffected if the CVA was voted through.
Arcadia needs 75% creditor approval to be able to launch its CVA and another creditor group that might not support it includes its landlords. Some are seeking a larger potential equity stake in the company than is on offer in exchange for lower rent deals and the ability to exit under-performing stores.
But a source source close to Arcadia told Retail Week that stakeholders should be “realistic in terms of where this group is, the financial performance of the group, the headwinds it’s facing and the fact it does need to reset its cost base in an effective way.”
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