// Matalan founder and chair John Hargreaves criticises the retailer’s debt and equity deal
// It had been seeking a £350m credit bail out and has now reached deal that will include a “significant reduction” in gross debt
Matalan founder and chairman John Hargreaves has expressed his “disappointment” at the retailer’s debt and equity deal, criticising it for piling on further debt.
The fashion retailer has been acquired by a group of investors including Invesco, Man GLG, Tresidor and Napier Park.
It had been seeking a £350 million credit bail out and has now reached deal that will include a “significant reduction” in gross debt from £593 million to £336 million.
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The finalisation of the deal led to Hargreaves being dropped from the deal, after teaming up with private equity firm Elliott Advisers for a 50:50 bid for the group.
Hargreaves said he was “disappointed” at the decision as it fails to deleverage its balance sheet and secure a long-term owner for the retailer.
Hargreaves Family Private Office said:” John Hargreaves and the Hargreaves family are disappointed by today’s announcement by Matalan.
“From the day he founded the company in 1985 through to the current sales process, John’s focus and commitment has been to act in the best interests of the company, its employees, suppliers and business partners.
“The Hargreaves family and Elliott bid would have left Matalan with less than £200m of debt and ultimately ensured it was best positioned for long-term success.
“John Hargreaves does not believe that the deal announced today with the first lien investors is an optimal outcome for Matalan and its key stakeholders.
“In particular, he is concerned that it fails to address the needs of the business to adequately deleverage its balance sheet and secure an appropriate long-term owner for the company, both of which were central to the Hargreaves family led bid.”