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AllSaints nears £50m funding deal

Young fashion chain AllSaints is understood to be finalising the terms of a potential £50m rescue deal to secure its long-term future.

AllSaints, which was effectively put up for sale in February, could confirm a new round of funding as early as today and is thought to be holding advanced negotiations with three potential investors, including US investment specialist Och Ziff and Goode Partners, according to reports.

Accountancy firm Ernst & Young is leading the talks after it was appointed by collapsed Icelandic banks Kaupthing and Glitnir to offload their stakes in the business. The retailer is thought to beunder pressure to secure funding ahead of the March 26 rent quarter day.

Och Ziff has a history of investing in UK retailers, including The Peacock Group.

Several other investors have looked at AllSaints, including Advent International and Oaktree Capital, but are thought to have withdrawn from the process.

Lloyds Banking Group provides AllSaints with its working capital facility.

AllSaints’ third-biggest shareholder is retail entrepreneur and the chain’s chairman Kevin Stanford. He is understood to have a special class of share, which is held in trust. His shares are expected to account for a littlemore than 50% of the equity with the rest owned by the new investors if a deal goes ahead.

In the year to January 31, 2010, AllSaints more than doubled pre-tax profits to £10.7m, on sales up 46% to £132.9m.

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