Matalan to file Chapter 15 case to gain recognition of U.K. scheme

By Caroline Salls

Pittsburgh, July 28 – Matalan Finance plc will make a Chapter 15 bankruptcy filing on Wednesday to obtain U.S. recognition of its U.K. scheme of arrangement, according to a news release.

The company said the scheme was approved by the requisite majorities of its creditors at a meeting held on July 20, was sanctioned on Monday by the High Court of Justice of England and Wales and became effective on Tuesday.

Matalan said the scheme provides that payment of interest on its 9½% second-lien secured notes due 2024 will be solely in-kind, provided that the issuer will be permitted to pay cash interest under specified conditions, including a reduction in overall debt and a minimum liquidity test.

Interest due July 31 on the notes will be paid in-kind.

According to the release, the successful implementation of the scheme enables Matalan to preserve cash during its post-Covid-19 recovery trajectory, and the scheme, along with additional liquidity measures announced in June, ensures that the group has sufficient headroom to trade through the Covid-19 pandemic.

Matalan is a Preston, England-based fashion and homeware retailer.

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