Lenders of Matalan, one of the UK’s largest budget retailers, are preparing for talks on the future financing of the chain in a context of rising inflation and deepening economic turmoil.
Sky News has learned that Matalan’s major bondholders are forming Perella Weinberg Partners to advise them on their options with a £ 350m repayment to take place early next year.
Meanwhile, more younger lenders, who are said to be owed about £ 80 million, are about to appoint Houlihan Lokey to advise them.
City sources said Friday that talks on a refinancing of Matalan’s balance sheet were expected to move forward in the coming weeks.
John Hargreaves, the company’s founder, will likely need to inject tens of millions of pounds of additional funding to maintain absolute control of the company, they added.
Although the details have not yet been finalized, the imminent appointment of advisers from two sets of lenders underscores the importance of the talks that will take place over the summer.
Matalan is one of the largest privately owned retailers in the UK, employing around 10,000 people and operating 230 stores in the UK, as well as more than 50 overseas through franchise agreements.
Talks involving Mr Hargreaves have been further boosted by a February legal ruling that would have to pay £ 135 million in taxes related to the sale of Matalan shares more than 20 years ago.
They also come when other retailers at the end of market discounts, such as the parent company of Poundland, warn that UK consumers are slowing down spending on all but essential purchases as the cost crisis of life increases.
Matalan declined to comment, though he said in February: “After the robust Christmas trading period, the business maintains a strong cash and liquidity position.
“Matalan continues to evaluate alternatives and monitor market conditions for possible refinancing of its outstanding debt.”