New Look completes restructure to cut debt and give it working capital
today May 3, 2019
Slashed debt, a cash injection and a new ownership structure divided between lenders and management should set up New Look for a more secure future, the company said on Friday. As the UK packed up for another bank holiday weekend, it announced a new £150 million capital injection with the implementation of a “comprehensive financial restructuring that establishes a sustainable long-term capital structure.”
It’s also now owned by a new entity made up of its lenders and management. And under the deal, its existing long-term debt has been significantly reduced from the massive £1.35 billion it had been carrying to a more manageable £350 million. The company had said back in January that it was working towards this goal that “better positions the group for growth.”
The £150 million comes in the form of new Senior Secured Notes (SSNs), which are largely being used “to support the future development of the business.” The company also said that the new flexible capital structure “possesses additional benefits that will allow New Look to better navigate the current market environment.”
The deal was implemented via schemes of arrangement under the UK Companies Act 2006 and through a sale of New Look Limited, together with its key operating subsidiaries, to a new holding group owned by a combination of the the SSN noteholders, existing noteholders and management. The shareholders will control the group through a newly incorporated entity in Jersey, New Look Retail Holdings Limited.
Alistair McGeorge, Executive Chairman, said of all this: “Today’s completion represents a significant milestone in our turnaround process and a major endorsement from our stakeholders in the strength of our brand and in management’s ability to deliver enhanced profitability through the wider strategy already being implemented.
“With a materially deleveraged balance sheet and a more flexible capital structure, we now have a stable operating platform, which positions us well to respond to challenges and grasp new market opportunities.
“We have already implemented significant improvements across our business, returning to a proven broad appeal product to rebuild our position in the UK womenswear market, enhancing our multichannel offering and bringing significant operational expertise to our business with the recent appointment of Nigel Oddy as Chief Operating Officer.
“With a highly experienced management team and a stable operating platform in place, we are now positioned to deliver on our wider plans and attack our future.”
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