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You can find the current article at its original source at https://www.theguardian.com/business/live/2019/jun/12/philip-green-arcadia-creditors-rescue-vote-jobs-business-live
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Arcadia rescue deal approved by creditors, saving 18,000 jobs - business live | |
(32 minutes later) | |
It’s Official: Arcadia’s creditors have, as we thought, approved the company’s rescue plan. | |
Here’s the company’s statement, which explains how the Green family are putting millions of pounds of their own money into the deal (to persuade landlords to swallow hefty rent reductions). | |
Arcadia Group creditors approve CVA proposals | |
Arcadia Group is pleased to announce that all seven of its Company Voluntary Arrangements (CVAs) have today been approved by the required majority of the companies’ creditors, including its pension trustees, suppliers and landlords. | |
As described in the CVA proposals, upon there being no remaining risk of challenge to the CVAs, the Group’s majority shareholder, Lady Green, will invest £50m of equity into the Group, in addition to the £50m of funding already provided in March. Lady Green has also agreed to fund the cost of the amended rental reduction terms within the CVA proposals, as announced on 7 June. | |
Separately, the Group has reached an agreement with the Trustees of the pension schemes, the Pensions Regulator and the Pension Protection Fund, by which Arcadia Group will reduce its deficit repair contributions from £50m to £25m per year, for three years, with security granted to the value of £210m over certain assets of the Group, to further support the schemes. | |
As previously announced, Lady Green will provide an additional £100m of cash into the schemes to help bridge the shortfall, with funding of £25m per year for the next three years plus an additional £25m contribution. | |
Property Week’s David Parsley has also heard that Sir Philip Green may have succeeded in persuading creditors to back his rescue plan. | |
ARCADIA UPDATE: Senior landlord source claims Arcadia rescue deal has passed. #arcadia announcement to confirm due at any moment.#arcadialive | |
My colleague Sarah Butler has heard that all seven of Arcadia’s CVAs have passed. | |
Hearing all seven Arcadia CVAs have passed.. | |
That’s unconfirmed at this stage -- but if it’s correct, it means that the threat of administration has been lifted. | |
It would mean that 23 stores would close, but the rest of Arcadia’s 500+ estate of shops would keep trading. | |
More to follow! | |
The delay is causing some jitters among Arcadia’s landlords..... | |
Arcadia vote result not till 5-5.30. One landlord just said to me "why is it taking so long to count up the votes.. especially as the place was teaming with Deloitte staff?". They're getting worried. | |
Oh dear! We’ve now hearing that the results of the creditors’ vote may not come for another hour or so. | Oh dear! We’ve now hearing that the results of the creditors’ vote may not come for another hour or so. |
Hearing we might not get result of Arcadia CVA vote until 5 or even 5.30.. not looking promising.. | Hearing we might not get result of Arcadia CVA vote until 5 or even 5.30.. not looking promising.. |
That’s two hours later than expected. | That’s two hours later than expected. |
What does it mean? | What does it mean? |
It could be a sign that at least one of the seven CVA agreements has been rejected (confusingly, there is one vote for each of Arcadia’s seven brands). | It could be a sign that at least one of the seven CVA agreements has been rejected (confusingly, there is one vote for each of Arcadia’s seven brands). |
Or it could mean that Sir Philip Green is engaged in some last-minute arm twisting. | Or it could mean that Sir Philip Green is engaged in some last-minute arm twisting. |
This is turning into a repeat of last Wednesday’s meeting, when the CVA process was dramatically delayed once it became clear the vote was going against Arcadia. | This is turning into a repeat of last Wednesday’s meeting, when the CVA process was dramatically delayed once it became clear the vote was going against Arcadia. |
Journalists, alas, weren’t allowed into today’s Arcadia meeting, but here’s some photos from outside: | Journalists, alas, weren’t allowed into today’s Arcadia meeting, but here’s some photos from outside: |
ARCADIA UPDATE: Such a little sign for such an important meeting. #arcadia #arcadialive pic.twitter.com/G7IHtVuV67 | ARCADIA UPDATE: Such a little sign for such an important meeting. #arcadia #arcadialive pic.twitter.com/G7IHtVuV67 |
One intrepid National journalist almost made it into the Arcadia CVA before security realised he wasn't P Green Esq pic.twitter.com/GR31PkrgwZ | One intrepid National journalist almost made it into the Arcadia CVA before security realised he wasn't P Green Esq pic.twitter.com/GR31PkrgwZ |
The bells of St Paul’s have rung out to mark 4pm. | The bells of St Paul’s have rung out to mark 4pm. |
But there’s no word from Arcadia’s creditors meeting, just around the corner from the Cathedral at Etc Venues on Aldersgate. Surely the result of the votes will come soon.... | But there’s no word from Arcadia’s creditors meeting, just around the corner from the Cathedral at Etc Venues on Aldersgate. Surely the result of the votes will come soon.... |
Brexit has helped to drag Arcadia to the brink of administration, says senior market analyst Fiona Cincotta of City Index. | Brexit has helped to drag Arcadia to the brink of administration, says senior market analyst Fiona Cincotta of City Index. |
She points out that a clutch of retailers have hit serious problems since the 2016 referendum: | She points out that a clutch of retailers have hit serious problems since the 2016 referendum: |
Brexit is slowly but incredibly persistently eroding the confidence and the spending power of the British consumer. The process started fairly discreetly but given that it has now been in place for close to three years it is claiming more and more victims. | Brexit is slowly but incredibly persistently eroding the confidence and the spending power of the British consumer. The process started fairly discreetly but given that it has now been in place for close to three years it is claiming more and more victims. |
Notable business failures this year alone include Debenhams, LK Bennett, Wine Direct, Office Outlet, Steamer Trading, Patisserie Valerie, OddBins and Jamie Oliver’s chain of restaurants. The list is already long and scary enough without adding the big closures of 2017 and 2018. | Notable business failures this year alone include Debenhams, LK Bennett, Wine Direct, Office Outlet, Steamer Trading, Patisserie Valerie, OddBins and Jamie Oliver’s chain of restaurants. The list is already long and scary enough without adding the big closures of 2017 and 2018. |
Factor in the rise in online shopping, and high business rates, and it all adds up to a crisis. | Factor in the rise in online shopping, and high business rates, and it all adds up to a crisis. |
The Arcadia crisis has put Company Voluntary Arrangements (CVA) under the spotlight. | The Arcadia crisis has put Company Voluntary Arrangements (CVA) under the spotlight. |
CVAs allow a company to restructure itself without going into a formal administration or liquidation. The theory is that it lets fundamentally decent businesses shed underperforming assets and keep running. | CVAs allow a company to restructure itself without going into a formal administration or liquidation. The theory is that it lets fundamentally decent businesses shed underperforming assets and keep running. |
The practice, critics say, is that creditors are kicked in the teeth when their customers use CVAs to escape contracts. | The practice, critics say, is that creditors are kicked in the teeth when their customers use CVAs to escape contracts. |
In Arcadia’s case, the firm hopes to cut its overall rental bill (which is says is simply too high in today’s retail environment), and close 23 stores (with another 27 are also earmarked for closure). | In Arcadia’s case, the firm hopes to cut its overall rental bill (which is says is simply too high in today’s retail environment), and close 23 stores (with another 27 are also earmarked for closure). |
Retail chain Sports Direct has just kicked out at CVAs, saying they let “barely managed” businesses limp on. It’s launching a legal challenge to Debenhams’ recent CVA (which thwarted Mike Ashley’s attempts to take the company over). | Retail chain Sports Direct has just kicked out at CVAs, saying they let “barely managed” businesses limp on. It’s launching a legal challenge to Debenhams’ recent CVA (which thwarted Mike Ashley’s attempts to take the company over). |
Sports Direct chooses the day of the second Arcadia CVA vote to criticise CVAs in a statement. It claims CVAs are “now being used as a tool to repair fundamentally barely managed businesses”. Yesterday Sports Direct and others launched a legal challenge against the Debenhams CVA pic.twitter.com/6khcipxWKW | Sports Direct chooses the day of the second Arcadia CVA vote to criticise CVAs in a statement. It claims CVAs are “now being used as a tool to repair fundamentally barely managed businesses”. Yesterday Sports Direct and others launched a legal challenge against the Debenhams CVA pic.twitter.com/6khcipxWKW |