Beleaguered DIY specialist Homebase could have another battle on its hands as it emerges a group of landlords could be gearing up to sue the retailer.
According to a report by The Times, property owners including asset managers M&G and Aberdeen Standard have hired law firm Hogan Lovells to challenge Homebase over rent cuts and shop closures proposed in its company voluntary arrangement (CVA).
Homebase’s CVA proposes the closure of 42 stores and rent cut between 25 per cent and 90 per cent on 70 other stores.
Creditors are due to vote on the CVA on Friday, with Homebase’s private equity owner Hilco Capital agreeing to add £25 million to the deal if the CVA is approved.
If the CVA were blocked, Homebase could almost certainly slip into administration, putting 11,000 jobs at risk.
Homebase’s financial troubles come after the Australian retail conglomerate Wesfarmer’s disastrous attempt to use it as a way of entering the UK market.
After acquiring the company in 2016, Wesfarmers began to convert Homebase stores to its Bunnings fascia, resulting in a loss on the disposal of between £200 million to £230 million.
It eventually sold the UK arm of company to Hilco for £1.
Since then, Hilco has been closing stores and streamlining Homebase’s operations, resulting in 303 jobs being cut at its head office in June.
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