House of Fraser solicits consents from holders of floaters due 2020

By Wendy Van Sickle

Columbus, Ohio, June 15 – House of Fraser (Funding) plc is asking holders of its £175 million floating-rate senior secured notes due 2020 to give their consents relating to some proposals for Company Voluntary Arrangements that were filed by House of Fraser (Stores) Ltd. and House of Fraser Ltd. on June 6, according to a notice.

As previously reported, as part of its planned restructuring, the company has entered into a lock up agreement with an ad hoc group of holders of more than 50% of the notes.

The lock up relates to consents, amendments and forbearances for the notes, which are required to allow the restructuring of the company’s portfolio of stores through the voluntary arrangements.

Under the consent solicitation that will formalize the amendments, the issuer is asking holders to agree to:

• A waiver of any deemed or actual default or event of default under the indenture and a rescission of any alleged, deemed or actual acceleration of the notes in connection with the filing of the proposed Company Voluntary Arrangements;

• Amendments to the indenture to allow the implementation of the proposed Company Voluntary Arrangements without causing any default or event of default under the indenture;

• Amendments to some provisions of the indenture that have been agreed between the issuer and the ad hoc group, which broadly relate to restricting certain existing flexibilities on permitted investments, asset dispositions, permitted payments and the incurrence of additional debt and a requirement that if any voluntary repayments or prepayments are made under House of Fraser’s senior facilities a proportionate payment or redemption is made for the notes; and

• Amendments to the indenture that will have the effect of submitting the parties to the indenture (including the trustee on behalf of the noteholders) to the jurisdiction of the courts of England and Wales and Scotland (in addition to the U.S. and New York courts already provided for in the indenture) in respect of any legal proceeding against them in relation to the indenture or the notes, and corresponding amendments to the intercreditor agreement.

The consent solicitation expires at 11 a.m. ET on June 21.

If the required consents are obtained and the execution date occurs prior to the expiration time, House of Fraser plans to terminate the consent solicitation on the execution date.

No consent payment is being offered.

As previously reported, House of Fraser has also entered into a consent and amendment letter with the majority lenders on its bank facilities.

“The retail industry is undergoing fundamental change and House of Fraser urgently needs to adapt to this fast-changing landscape in order to give it a future and allow it to thrive,” said House of Fraser chairman Frank Slevin in a previous announcement.

“Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business.”

The company plans to close 31 of the 59 leased stores that it occupies in the United Kingdom and Ireland.

House of Fraser said in Friday’s update that it is continuing discussions with lenders and the ad hoc group of noteholders in connection with the potential change of control related to the transaction between C.banner International Holdings Ltd. and Nanjing Xinjiekou Department Store Co., Ltd.

The proposed acquisition of a 51% stake in House of Fraser Group Ltd. by C.banner International Holdings will introduce “significant new capital” into the business, House of Fraser previously said.

Lucid Issuer Services Ltd. (+44 20 7704 0880 or hof@lucid-is.com) is the information and tabulation agent for the consent solicitation.

House of Fraser is a London-based department store company.

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