LANDLORDS and other creditors will meet on Wednesday in London to vote on revised proposals to save Sir Philip Green’s Arcadia retail empire reports the BBC.
Arcadia’s brands include Topshop, Miss Selfridge, Burton, Dorothy Perkins, Evans and Wallis.
Last week, a vote on Sir Philip’s proposals was postponed after some landlords, including shopping centre owner Intu, refused to back it.
It is understood that Intu is planning to vote against the rescue plans.
Sir Philip has warned that Arcadia could fall into administration if the new proposals are not approved.
What is at stake?
In May, Arcadia announced that it was in serious trouble, facing “significant liquidity issues”.
It is struggling to pay fixed charges of £100m a year, with earnings in 2019 expected to be only £30m, down from £219m two years ago.
In order to save the business, Sir Philip has proposed implementing a Company Voluntary Arrangement (CVA), which is a renegotiation of terms with a company’s creditors as part of an insolvency procedure.
However, creditors must approve not one, but seven different CVAs, in order for the business to survive, as Arcadia’s companies are interlinked.
Sir Philip Green revised his rescue plans after landlords refused to back his initial deal
The first proposals involved the closure of 48 stores, the loss of around 1,000 jobs and a rent reduction of between 30% to 70% on 194 stores.
Sir Philip would invest £50m into the business. He also pledged to increase net pension contributions over three years, and to give landlords a 20% stake in Arcadia, but only if it is sold.
On 5 June, the vote was postponed after some landlords refused to back the deal.
What is now on the table?
On 7 June, Sir Philip announced revised plans in a last-ditch attempt to bring landlords of his stores back on board.
He is now asking landlords to agree to rent cuts of between 25% and 50% instead, as well as improved terms on break clauses for leases.
The shortfall in rent will be plugged by £9.5m provided by the Green family.