April 26, 2018 / 3:14 PM / in 10 months

Carpetright creditors back UK restructuring plan

FILE PHOTO: A sign hangs above the door of a Carpetright store in Derby, Britain January 19, 2018. REUTERS/Darren Staples/File Photo

LONDON (Reuters) - Creditors and landlords of Carpetright (CPRC.L) approved the struggling British retailer’s restructuring plan at a meeting on Thursday.

Earlier this month the floor coverings retailer said it would seek creditor approval for a Company Voluntary Arrangement (CVA).

The plan involves the closure of 92 stores and rent reductions at 113 others. Up to 300 jobs could go.

At Thursday’s meeting of creditors, the CVA was approved by a majority of more than 75 percent in value of the unsecured creditors present, the company said. The CVA meeting for shareholders will be held on April 30.

Shares in Carpetright have lost over 80 percent of their value over the last year following a series of profit warnings.

With UK consumer spending under pressure Carpetright, which trades from 409 shops across Britain, is not alone in finding the going tough.

Already this year Toys R Us UK, electricals group Maplin and drinks wholesaler Conviviality have plunged into administration, while fashion retailer New Look is also closing stores.

Carpetright also wants to raise 60 million pounds through an equity issue to reduce its indebtedness and fund the restructuring plan.

On Monday, its biggest shareholder, Meditor Capital Management, said it had raised its stake to 29.99 percent - just under the threshold which would require it to make a formal takeover offer.

Reporting by James Davey, Editing by Paul Sandle and Alexandra Hudson

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