Arcadia refuses any more concessions to win CVA approval

4435
Arcadia pensions CVA
// Arcadia refuses to offer any more concessions regarding pension funds & equity stakes for landlords
// This plunges its CVA into uncertainty, as pension stakeholders remain unconvinced
// Landlords are also reportedly seeking more of an equity stake than what is on offer in the CVA

Arcadia Group’s CVA now hangs in the balance amid reports that it refuses to offer any more concessions regarding its pension funds and equity stakes for landlords.

Earlier this week, Sir Philip Green offered to provide £185 million in additional funds from property assets to help reduce reduce his retail empire’s pension deficit as part of a bid to win approval for its CVA.

This includes security over Arcadia’s flagship Topshop Oxford Street store, which would allow the property to be sold to shore up the pension deficit if a CVA is not enough to replenish Arcadia’s coffers.

Lady Tina Green – wife of Sir Philip and a major shareholder of Arcadia – is already set to inject £50 million of equity into the business, on top of £50 million she has already loaned, if the CVA is approved.

However, Arcadia’s CVA proposals also includes a reduction of contributions to the pension deficit – from £50 million to £25 million.

With a pension debt reportedly around £565 million and the Pension Regulator opposing the its proposals, Arcadia is reportedly digging in its heels and not offering any more concessions, according to Retail Week.

Sources speaking to the magazine said pension stakeholders were unconvinced by the proposals, while Arcadia insists pensioners would be unaffected if the CVA was voted through.

Meanwhile, landlords are reportedly seeking a larger equity stake in Arcadia than what has been offered in the CVA proposals, in exchange for lower rent deals and the ability to exit under-performing stores.

However, an Arcadia source told Retail Week that stakeholders should be “realistic in terms of where this group is, the financial performance of the group, the headwinds it’s facing and the fact it does need to reset its cost base in an effective way”.

Arcadia directors will meet creditors – which includes The Pensions Regulator, the Pension Protection Fund and landlords – on June 5 to seek approval for its CVA proposals.

The CVA will only go ahead if at least 75 per cent of creditors vote in favour of it.

Click here to sign up to Retail Gazette‘s free daily email newsletter

4 COMMENTS

  1. He should be called Sir, and he should be stripped of all his assets and deported as he has no respect for our country or our people!

    • How does he not have respect for the U.K. or it’s people? It’s somewhat misguided to throw away the contributions of a man and his family over decades, and which lead to him being Knighted, because of a misstep with the disposal of BHS and a rapidly changing trading environment which is beyond the control of many businesses.

  2. Has no one learnt the lesson from what happened with BHS. All Mr Green is doing is trying to get out of his responsibilities. As he did with BHS. He asset striped to the tune of 2 billion pounds from BHS and never re invested back . He should be got rid of full stop. Then they may have a chance to move forward. As I am an x member of staff at BHS.

  3. Green is playing games.
    The CVA will be rejected next week, Green will blame everone else for the collapse of Arcadia and will be on a plane to Monaco.
    Arrest him today.

LEAVE A REPLY

Please enter your comment!
Please enter your name here