New Look has urged its landlords to back its restructuring plans after the struggling high street retailer failed to attract a buyer.
The company said this morning that some parties had expressed an interest in certain New Look assets, however no bid was received for the firm.
New Look’s landlords and other creditors will now have to vote on a proposed company voluntary arrangement (CVA) – its second in three years – as the retailer seeks to restructure its UK leasehold obligations.
The high street brand is attempting to switch to turnover-based leases across its portfolio, having already closed stores and negotiated rent reductions as part of previous restructuring plans.
The proposals must be backed by 75 per cent of New Look’s unsecured creditors at a vote on 15 September in order for the restructuring to go ahead.
“If unsecured creditors do not support the company’s CVA, the directors of the company will have to consider less favourable alternatives than the current transaction for the Group’s stakeholders including its creditors (including those unsecured creditors), customers and employees,” New Look said in a statement.
New Look has also agreed the key terms of a recapitalisation with its banks and bondholders, including a debt for equity swap which will reduce its debt from £550m to £100m.
It will also decrease interest costs, gain an extension of working capital facilities and secure an injection of £40m of new capital.
New Look chief executive Nigel Oddy said the recapitalisation, which is aimed at saving 12,000 jobs, “can only be delivered if we secure the support of our landlords for our forthcoming CVA”.