Lenders to the embattled department store House of Fraser are said to be demanding evidence that the retailer’s Chinese owner will invest fresh funding into the business.
Sky News reports that lenders have expressed frustration over a lack of clarity in HoF’s financing plans for its proposed company voluntary arrangement (CVA) deal.
HSBC and Industrial & Commercial Bank of China are said to be demanding evidence that a promised £70m of new capital will be invested into the business. Talks are ongoing, but sources indicate that there is still doubt over whether a deal could be reached with lenders to launch the proposed CVA.
The CVA is already facing a backlash, as a group of landlords are set to challenge Ho to demand better terms, as it tries to push through rent cuts and shop closures.
Following the announcement in May that the business was planning to launch a CVA deal, HoF revealed a loss of nearly £44m for the year to December 31, compared with a profit of £1.5m in 2016, as one-off start-up and operating costs in China dented revenue.