D-Day for BHS CVA vote
Creditors are set to meet today to vote on backing the CVA or placing the 90-year-old company into receivership
STRUGGLING retailer BHS is pinning its survival hopes on its creditors voting to agree to a Company Voluntary Arrangement (CVA) today.
Without it the future of the High Street department store chain looks decidedly bleak with administration and big job losses on the cards.
The stores’ creditors are set to meet in London today to vote on backing the CVA or placing the 90-year-old company into receivership.
It needs 50% of its landlords and 75% of its creditors to agree to the deal in a bid to reduce the rent it pays on 87 of its 164 shops.
However, even if landlords agree a deal, BHS warns that it needs extra funding to trade after 25 March and it is frantically trying to raise around £100m in additional finance.
KPMG – recently engaged by the retailer to explore a number of options to shrink its store empire over its “unsustainable” rents – prepared the CVA proposal for both BHS Limited and BHS Properties Limited.
Grant Thornton is understood to be looking at ways to ease the burden of the firm on its struggling pension scheme, which is facing a massive £570m shortfall, added further pressures to the chain.
BHS, which was sold by Sir Philip Green a year ago for £1 to Retail Acquisitions, consortium of investors, has warned creditors they face losses of over £1bn if it fails.
The CVA proposes to divide BHS’s 164 store portfolio into three main categories, based on the commercial viability and strategic importance of each site.