Carpetright’s largest shareholder has swallowed up £40.7m of the retailer’s debt seeing shares soar 13% to 15.2p in early morning trading.
Meditor European Master Fund will now control the firm’s revolving credit facility of £40.7m after underwriting a loan from Natwest and Ulster Bank.
Carpetright said, “The overdrafts will continue to be provided by NatWest and Ulster Bank.”
“However, Meditor has agreed to enter into participation agreements with Natwest and Ulster Bank, pursuant to which Meditor will acquire a 100% participation interest in each overdraft facility, effectively providing funding for the banks. The terms of the overdrafts remain unchanged.”
Earlier this year the retailer revealed sales had slummed by 13.4% to £386.4m as customers stayed clear over fears the company could collapse.
Pre-tax losses have improve from £69.8m to £24.8m.
Shore Capital said, “In our view, this is another staging post in the Carpetright recovery following the CVA and rescue rights issue last year, which gave the company a fighting chance to rebuild profits and cashflow to a more sustainable level.”
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