Clarks pension trustees hire advisers to secure new investment

Clarks Giorgio Presca pension scheme
Pension trustees at Clarks are wading into the battle to secure control of the 195-year-old chain
// Clarks pension trustees working with advisers amid sale talks
// They were “actively engaged” with the company about interest from bidders LionRock Capital and Alteri Investors

Clarks pension trustees are reportedly working with advisers amid talks about the company’s future to secure new investment.

The shoe retailer’s retirement scheme has drafted in advisers from Penfida and FRP Advisory as discussions with two potential bidders are in progress.

Clarks’ pension trustees were “actively engaged” with the company about interest from bidders LionRock Capital and Alteri Investors, Sky News reported.

READ MORE: Hong Kong investor joins bidding war for majority stake in Clarks

Both companies have submitted offers that would involve a taking a majority stake in the retailer.

Clarks’ pension scheme is well-funded, although it has a deficit of nearly £200 million on a full buyout basis.

A conclusion to talks about a refinancing of Clarks is expected this month.

Moreover, the Clark family is likely to retain an equity stake in the business, which may be reduced to less than 50 per cent – depending on the discussions.

Clarks first revealed discussions about a share sale back in May, with around £100 million and £150 million likely to be injected into the business as part of any deal.

The company’s chief executive Giorgio Presca said at the time that its new strategy ‘Made to Last’ will aim to transform it amid the pandemic.

Clarks said at the time that the strategy will result in 900 job losses, and 200 new roles.

A string of accountancy firms are working on a restructuring of Clarks as it continues to struggle with trading amid the pandemic.

The chain’s family shareholders have drafted in KPMG to advise them, while Deloitte has been hired by the management team.

PwC had been appointed by a syndicate of the footwear chain’s lenders as they assess the Covid-19 impact on its prospects.

Meanwhile, investment bank Rothschild is also advising the company.

Clarks trades from about 345 stores in the UK, employing thousands of people, but has denied that it will be exploring a CVA.

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