Flooring retailer becomes the latest to apply for a CVA
Carpetright has asked its creditors to agree to a company voluntary arrangement that will involve a fundamental restructuring of its property portfolio.
The company said 205 out of its 480 UK sites in the UK are underperforming and 92 of these have been identified for closure in the short term under the CVA proposal. Landlords on another 113 sites being subject will face a rent cut and revised lease terms.
Creditors will be asked to vote on the proposal on April 26 and Carpetright shareholders will vote on the CVA and an associated £60m equity raise on April 30.
Carpetright CEO Wilf Walsh said: “These tough but necessary actions will enable us to address the burden of a legacy UK property estate consisting of too many poorly located stores on unsustainable rents and are essential if we are to restore our profitability and deliver a successful turnaround.”
The proposal has won the backing of the British Porperty Federation and assistant director of real estate policy Stephanie Pollitt said: “These situations are never easy as landlords need to take into consideration the impact on their investors, including those protecting pensioners’ savings, as they vote on the CVA proposal.
“Carpetright and Deloitte, however, have demonstrated best practice, constructively engaging with the BPF early in the process and ensuring landlords’ interests have been properly taken into account. Ultimately, it will be for individual landlords to decide how they will vote on the CVA, but the proposal has sought to find a solution that works for all parties.”