// Card Factory enlisted Deloitte to help raise £100m loan to help pay debts, but discussions led no where
// Card Factory is now seeking new financing arrangements with existing lenders
// Distressed debt investors are also reportedly circling Card Factory
Card Factory has reportedly turned to restructuring experts to raise money to help the business stay afloat through the pandemic.
According to The Sunday Times, consultants from Deloitte approached specialist lenders to try and raise £100 million for the greeting cards retailer.
Half of that was meant to be used to repay Card Factory’s existing debts, but these discussions were not successful.
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As a result, Card Factory has reportedly sought new financing arrangements with its existing lenders at HSBC, NatWest, Santander and Lloyds.
The Sunday Times said current discussions with the banks were “positive”.
Meanwhile, distressed debt investors are also reportedly circling Card Factory.
It comes after Card Factory had been given an extra month to negotiate with lenders to avoid breaching banking covenants on a £200 million loan.
Bosses had warned the retailer was set to breach the loan rules by the end of January following a plunge in sales during the Covid-19 pandemic.
However, lenders provided a waiver to the expected breach until February 28.
In January, Card Factory revealed that sales fell by 38.1 per cent after its stores were forced to shut completely for 37 per cent of potential trading days because of coronavirus lockdowns.
Its online channels performed “strongly” over the 11 months to the end of 2020, with cardfactory.com reporting 137 per cent growth in like-for-like sales, while its trade sales grew by 63 per cent.
The retailer said at the time that it expected to report a pre-tax loss of about £10 million for the year, compared with a profit of more than £65 million in the year before the Covid-19 pandemic.