House of Fraser has denied media speculation that its future hangs in the balance, claiming the business is still on track with proposals to launch a company voluntary arrangement (CVA) this month.
On 2 May HoF said it intended to launch a CVA in early June. The CVA is a condition of a transaction which will see international retailer C.banner acquire 51% of House of Fraser from current parent company Cenbest.
A report by The Sunday Times said HoF’s banks, HSBC and Industrial and Commercial Bank of China (ICBC), are unsure about the deal and are demanding evidence that C.banner will deliver £70m of investment into the retailer as promised.
In a statement made on 3 June HoF said it “is in close dialogue with its lending banks who are supportive of the company’s plans and the transaction with C.banner is progressing as expected.”
The struggling retailer added that on 1 June C.banner entered into subscription agreements for new shares in C.Banner of HK$1.3bn (£124m) and “irrevocable undertakings were signed” on 3 June by the majority shareholder in C.banner, approving all elements of the proposed transaction.
Frank Slevin, HoF chairman said: “We are on track with our plans to enter the proposed CVA agreement. The funding news from C.banner is another important milestone in this complex process.
“We continue to have very constructive talks with our banks and other stakeholders who are positive about the plans.”
Alex Williamson, HoF CEO, added: “If we are to deliver a sustainable, long-term business supported by new liquidity then we need to make difficult decisions about our underperforming legacy stores. I am conscious that inaccurate speculation only feeds the ongoing uncertainty for my colleagues in the business and I reassure them we will share further news when we have it.”