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New Look’s biggest landlords have reportedly rejected the retailer’s CVA plan in a move that will “throw its survival into doubt”.
British Land and Landesc are now set to vote against its latest rescue plan in a vote that will be held later today (15 September), according to Sky News.
The two landlords own 29 New Look stores between them, with British Land owning 19 stores, while Landsec owns 10.
According to Sky, retail landlord Hammerson is also said to be “leaning towards” a vote against the CVA later today.
New Look first revealed it was calling on its landlords to support a restructuring plan last week, in a move that would reduce rent paid on retail sites after it failed to attract a buyer for the business.
A successful vote would see the financial restructuring concluded, but New Look warned that if unsecured creditors did not support the CVA, New Look’s directors will have to “consider less favourable alternatives” than the current transaction.
The transaction, which would materially reduce long-term debt if completed, is contingent upon 75% of unsecured creditors of New Look Retailers Limited supporting the terms of the CVA proposal.
A New Look spokesperson told Sky: “Our proposed CVA and consequential recapitalisation transaction, which involves a material reduction of debt, extension of the company’s banking facilities and a cash investment of £40m represents the best outcome for all stakeholders, including employees, suppliers, landlords and all other creditors.
“Our landlords have given us valuable and constructive feedback since we initiated discussions in May regarding a required move to turnover rents.”
They added: “Our CVA proposal recognises this in a number of material changes we have made since our initial proposal, including enhanced landlord break clauses, unchanged service charges, minimum rent levels, and an elevated ranking of leases.”
Retail Sector has contacted New Look for comment.
