New Look’s bondholders form powerful committee ahead of CVA

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Embattled fashion retailer New Look has seen its bondholders call in top lawyers to help ensure their interests are protected should the retailer go under.

Following reports last week that New Look was considering a Company Voluntary Agreement (CVA) in an attempt to restructure its finances and significant debt pile, bond prices plummeted.

According to The Telegraph, a group of Wall Street private equity firms and hedge fund managers including Carlyle, M&G Investments, asset managers CQS and Alcentra, alongside distressed debt investor Avenue Capital Group, have formed a powerful committee.

The committee is understood to be being advised by law firm Sidley Austin, as they seek to protect their assets amid fears that New Look’s financial overhaul could be wider than planned.

They have also reportedly sought advice regarding converting debt into equity.

This comes as New Look prepares to shutter 10 per cent of its stores in a bid to reduce rent prices, though this move must be approved by 75 per cent of creditors which include bondholders.

As a result of falling bond prices, investors have also begun buying up some of its £1.2 billion debt pile.

However Alistair McGeorge, New Look’s former chairman who has been parachuted back in to lead turnaround efforts, has said he wouldn’t consider a situation in which bondholders are able to seize control.

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