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House of Fraser creditors unanimously approve schemes of arrangement
By Caroline Salls
Pittsburgh, July 19 – House of Fraser and House of Fraser (Stores) Ltd.’s schemes of arrangement were unanimously approved by creditors at meetings held Thursday, according to a news release.
Scheme creditors representing 87.77% in value of the total scheme claims participated in the meetings.
Implementation of the schemes is subject to approval by the English and Scottish courts at hearings scheduled to take place on July 25 and July 26 and other scheme conditions.
As previously reported, C.banner International Holding Ltd. conditionally agreed to acquire a 51% stake in House of Fraser Group Ltd. The company said the transaction is expected to result in a roughly £70 million capital injection into the U.K. House of Fraser group.
The company said the purpose of the schemes is to extend all applicable maturity dates under the notes and facilities agreements to Oct. 30, 2020, amend change-of-control provisions so the lenders and noteholders will not be entitled to be repaid or have their notes redeemed as a consequence of the transaction, provided that the transaction is completed by Aug. 20, and allows up to £50 million of new debt to be incurred.
In addition, the schemes will reduce the length of time, to 10 business days from 60 days, during which a default under the notes indenture related to the requirement to deliver the annual report for the fiscal year ended Jan. 27 may be cured from the scheme effective date through Aug. 20.
If the schemes are implemented, all scheme creditors will be entitled to receive an extension fee, which will be 1% of the principal amount of debt outstanding on July 18.
The scheme proposals are central to the ongoing significant restructuring of the business, which will facilitate a recapitalization of the House of Fraser group through the transaction and will allow its management team to continue to implement their transformational strategy.
House of Fraser is a London-based department store company.
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