Hedge fund nearly doubles stake in Carpetright ahead of CVA vote

April 24th, 20188:57 am @

0


Carpetright

The largest shareholder of Carpetright has taken advantage of its rock-bottom share prices and nearly doubled its stake as the company prepares to vote on a company voluntary arrangement (CVA)

UK based hedge fund Meditor Capital Management raised its stake in the embattled retailer from 16.5 per cent to 29.9 per cent earlier this week.

If Meditor had gone over the 30 per cent threshold, it would have had to make a formal takeover bid for Carpetright.

READ MORE:

Carpetright scrambles to secure funds as it plans for CVA

Although it stopped short of making a bid for the firm, Meditor invested £12.5 million into Carpetright via a loan last month in exchange for new shares. It is understood to have purchased its latest round of shares from Franklin Templeton, which reduced its stake from 16 per cent to 1.7 per cent.

This comes ahead of a vote by shareholders and landlords on Thursday to push through a CVA, which could jeopardize 300 jobs, shut 81 stores and slash rents on a further 113.

In January its share price dropped 47 per cent as it reported a 3.6 per cent drop in sales over the crucial Christmas period, this followed a further 93 per cent drop in profits a month before.

Last month its chief executive admitted that the “aggressive store opening strategy pursued by the company’s previous leadership has left Carpetright burdened with an oversized property estate consisting of too many poorly located stores on rents which are simply unsustainable.”

It has since been scrambling to secure funds of between £40 million and £60 million from its investors.

Click here to sign up to Retail Gazette’s free daily email newsletter

 

Article source: https://www.retailgazette.co.uk/blog/2018/04/hedge-fund-nearly-doubles-stake-carpetright-ahead-cva-vote/