Bondholders are reportedly seeking discussions with Matalan, the value fashion and lifestyle retailer, regarding the company’s financing. As inflation rises and economic difficulties loom, two groups of lenders are demanding clarity on how Matalan plans to repay its debt. Sky News reports that Matalan’s senior bondholders are considering Perella Weinberg Partners for advice on their options regarding a £350 million repayment due early next year. Similarly, more junior lenders, who are allegedly owed around £80 million, are close to appointing Houlihan Lokey for guidance.

The founder of Matalan, John Hargreaves, who privately owns the retailer, may need to inject substantial additional funding into the company to maintain full control. City analysts suggest that Hargreaves could require tens of millions of pounds for this purpose. However, Hargreaves also faced a setback earlier this year when he lost a legal battle and was ordered to pay £135 million in capital gains tax on the sale of £231 million worth of Matalan shares dating back to 2000.

Matalan is aware of the need to monitor market conditions for potential refinancing of its outstanding debts. In its most recent published results in January, the company reported a strong Q3 performance, including the Christmas trading period, with revenues increasing by 19% year-on-year to £291.4 million.

In these uncertain times, careful financial planning and open communication between Matalan and its bondholders are crucial. With inflation and economic challenges on the horizon, the company must address the concerns of its lenders and find effective solutions for the future. The potential involvement of advisory firms such as Perella Weinberg Partners and Houlihan Lokey demonstrates the seriousness of the situation and the need for expert guidance. Matalan must navigate these financial hurdles to ensure its sustainability and success in the competitive retail industry.

Useful links:
1. Perella Weinberg Partners
2. Houlihan Lokey