Landlords back Company Voluntary Arrangement at outdoor clothing retailer
The creditors involved at Blacks Leisure, the outdoor clothing retailer, has
approved the Company Voluntary Arrangement deal.
The CVA set out a financial compromise between landlords of the unoccupied
stores and the company.
The administration process needed a minimum 75% vote but managed to get the
backing of 98% of the creditors.
Richard Fleming, UK head of restructuring at KPMG and ‘supervisor’ of the
CVA, said: “This is a pivotal moment in the turnaround of Blacks. Without the
approval of the CVA, the company faced administration, putting 4,300 jobs and
291 trading stores at risk.”
Fleming continued: “The CVA agreement between Blacks and its creditors shows
that a less destructive insolvency process is possible.”
Brian Green, restructuring partner at KPMG and ‘supervisor’ of the CVA,
added: “The CVA of Blacks follows the JJB ‘model’ and, in very difficult
circumstances, it provides landlords with a level of compensation for the
termination of long lease obligations.”
“While the recession continues to bite, it is important that companies work
with their creditors to strike a fair balance between meeting their contractual
obligations and protecting the healthy parts of the business,” he said.
As part of the CVA the landlords of the unoccupied stores will receive a
total compensation package of £7.25m which equates to approximately six months
Blacks has approximately 392 stores in the UK and Ireland.
A CVA is an administration process which allows companies to repay some or
all of its debts based on future profits but needs to be voted for by the
majority of creditors.