16th Sep 2019 13:23
(Alliance News) - Carpetright PLC said Monday that some repayments of its GBP40.7 million revolving credit facility have been postponed following its major shareholder agreeing to purchase the lending facility.
Meditor European Master Fund Ltd has now become the lender under the facility, and due to London listing rules, the operation of the facility will now constitute a related-party transaction.
As a result, Carpetright is required to seek shareholder approval to continue operating the facility.
Meditor - which holds a 30% stake in Carpetright - agreed to buy the GBP40.7 million revolving credit facility from the current providers, NatWest and Allied Irish Banks, at the end of August whilst also retaining the current terms of the facility. In addition, Meditor has agreed to provide funding to NatWest and Ulster Bank for the current GBP6.5 million overdraft facilities currently provided by the two lenders.
At the time, Carpetright emphasised that the participation of Meditor in the facilities held by the firm were at an "arms-length" to the company. Meditor did not seek any assurances from Carpetright and did not propose any board representation or structural changes at the company.
On Monday, Meditor agreed with the carpet retailer to postpone some repayments until shareholder approval is granted or by October 21. The general meeting at which shareholder approval will be sought in expected to take place in October.
"The company intends to enter into full form documentation as soon as possible with respect to such arrangements," said Carpetright.
"The directors are comfortable with the company's financial position and expect that this period will provide the company with sufficient time to seek independent shareholder approval for the continued operation of the revolving credit facility."
Shares in Carpetright were 1.7% higher in London on Monday at 11.70 pence each.
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