House of Fraser lenders agree to extend loans

House of Fraser has agreed an extension for its loans ahead of this Friday’s vote on a possible CVA that could see 31 stores close.

According to the Press Association, the lender has conditionally agreed to a £125m loan as well as a £100m revolving credit facility providing the planned CVA is agreed by creditors.

The extension will give the department store chain over a year to try and implement its turnaround strategy with the deadline now said to be set as the fourth quarter of the FY 2020.

The agreement is said to have followed discussions between House of Fraser, HSBC and the Industrial and Commercial Bank of China.

At the start of the month the company announced the plans to close 31 stores as part of its CVA proposals, due to its current property portfolio being “unsustainable in its current form”.

As part of the CVA process, which could see the loss of around 6,000 jobs, the company has also proposed to relocate its Baker Street head office and Granite House office in Glasgow to new locations. This will be done to reduce costs and and further secure the group’s future.

A spokesperson for House of Fraser said: “A CVA is the only viable option for House of Fraser at this stage and we are confident, if approved, that this will secure a sustainable future for HoF.”