// Carpetright shareholders agrees to buy revolving credit facility from lenders NatWest & AIB
// Deal will see Meditor take over the £40.7m facility, with NatWest & Ulster Bank continuing to provide an overdraft of £6.5m
// Meditor wants to “engage with the company but has not asked for a seat on the board
Carpetright’s biggest shareholder has bought the retailer’s debts but has stopped short of asking for a seat on the board.
Meditor will now control Carpetright’s revolving credit facility of £40.7 million, instead of previous lenders NatWest and AIB.
The private investment vehicle controlled by former Old Mutual fund manager and poker player Talal Shakerchi said it planned to engage with Carpetright to provide longer-term, stable funding.
Meanwhile, Carpetright said a day-to-day overdraft of £6.5 million with NatWest and Ulster Bank will remain in place.
The flooring retailer has been struggling with a huge debt pile for several years and was forced to turn to Meditor for two short-term loans last year.
The first in March was £12.5 million, with an arrangement fee of £1.9 million and three per cent interest.
The second – a £15 million loan in May – came with a £2.3 million fee and interest of 18 per cent.
However, Carpetright said debts have been falling following the sale of two properties in Amsterdam.
The retailer also played down suggestions that Meditor was trying to squeeze the business.
“Meditor has confirmed it now intends to engage with the company with a view to providing a more stable and longer-term funding platform,” Carpetright said in a statement.
It added: “In connection with the arrangements, Meditor did not seek any assurances from the company, did not propose board representation and did not request structural changes in the business.”
Last year had been particularly hard for Carpetright, with a CVA insolvency process leading to creditors taking a hefty cut to their debts.
It also led to 80 Carpertright stores closing.
Earlier this year, the retailer revealed sales had taken a significant dent – down 13.4 per cent to £386.4 million.
However, pre-tax losses improved from £69.8 million to £24.8 million.