Matalan said to be up for sale if refinancing fails - report

By

Nigel TAYLOR

Published
Sep 5, 2022

Matalan is seeking a buyer for the UK value fashion/lifestyle chain ahead of a critical refinancing, reports claim. Executive chairman John Hargreaves is understood to be working with advisors at financier Lazard to find either a buyer for the entire business or an investor to provide fresh backing.
 

Although Matalan had £121 million of cash at the end of May it also has £350 million of secured debt falling due at the end of January.

Matalan's lenders, which are being advised by Perella Weinberg, are seeking £100 million in fresh equity, according to the Sunday Times, which first reported the story. 

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The company sealed a £60 million revolving credit facility in June in an attempt to shore up its balance sheet to help weather the pressure caused by weakening demand in the face of the growing cost-of-living crisis. 

Hargreaves, who reinstated himself as executive chairman in July, offered to inject tens of millions of pounds into the business last month, but there are doubts over his ability to stump up more cash. He is currently facing a tax bill of up to £135 million after the High Court ruled he was liable for capital gains tax on a £231 million share sale just two months after moving to the tax haven of Monaco in 2000.

Matalan, which claims 11 million customers, trades from around 230 stores across the UK, its e-commerce website as well as 50 franchise stores overseas. It reported underlying profits of £100 million last year as sales grew 38% to £1.03 billion.