Private equity firm Sun European Partners, owner of bed retailer Dreams, has paid the retailer‘s suppliers and trade creditors £23 million to pay off debts amounted when it collapsed into administration earlier this year, it is understood.
Acquiring the specialist retailer through a pre-pack administration in March, Sun European left creditors with £106 million worth of debt, according to The Telegraph, which includes a £5 million debt owed to HM Revenue and Customs.
Now, the firm has paid out 75p in the £1 to trade creditors and repaid £11 million in customers‘ deposits, though this still leaves £65 million of debts unpaid, including £24 million in future rental payments, while landlords of the 95 closed Dreams stores have been left with “worthless leases”, the newspaper noted.
Sun European said that debt to the HMRC can be offset by VAT and PAYE income from the rejuvenated brand and remains confident that its acquisition of 171 stores which saved some 1,650 jobs will prove profitable in the long-term.
A Dreams spokesman said: “Through the pre-pack administration we were able to safeguard the majority of jobs and stores in our organisation.
“Our customers and suppliers are of paramount importance. Sun European Partners recognise this and we have been working with them to protect as many of our stakeholders as possible.”