Friday 17 November 2017

Arnotts in running to buy back its Anglo loans

Retailer and partner confident they can win fight to control €230m debt

A SHOPPER'S HEAVEN: Arnotts is 'likely' to stay out of Nama
A SHOPPER'S HEAVEN: Arnotts is 'likely' to stay out of Nama

Roisin Burke

Arnotts and its British partner are through to the final round of bidding as it fights to buy back its €230m Anglo loans.

Arnotts' partner is a London financial investor with both retail and non-retail interests. It is not a private equity house nor a branded retailer, it is understood.

The 170-year-old department store business's other creditor, Ulster Bank, is now looking at putting its €140m Arnotts loans in play to piggy back on the buzz around the IBRC loan sale. Ulster has had half a dozen approaches on its stake.

A price tag of rather less than earlier pre-IBRC sell-off suggestions of around €200m is thought likely.

"Arnotts is likely to stay out of Nama and be bought," chairman Nigel Blow said. "We are well placed to succeed and confident we've found the right partner."

There are thought to be four final bidders on the shortlist, of which Arnotts and its partner, sourced through Investec, is one. Other names in the frame include Selfridges and the Brown Thomas-owning Weston family and House of Fraser's owner.

Palladin, the Boston retail restructuring group that ran Arnotts for three years until March, was believed to be bidding on its Anglo loans but it's not known if it made it through to this final eliminator round.

Fellow Bostonite and Clerys owner Gordon Brothers considered Arnotts last year but viewed the expected asking price as too expensive.

The deadline for final IBRC loan bids, which are being sold as part of the IBRC special liquidator's Project Evergreen portfolio is Friday, December 6, on a highest-bidder-wins format.

The company and employee preference is for a long-term investor buyer with an interest in expanding the business rather than flipping it in a few years.

Investment giant and hedge fund Anchorage, where former AIB figure Dan O'Connor has been involved, discussed a buy of Arnotts with its controlling banks at one stage. Advisers Key Capital are liaised with Arnotts' creditor banks on behalf of at least prospective buyer.

Arnotts fell into the hands of its bankers in 2010 after it was overwhelmed by borrowings taken on to build the ambitious Northern Quarter, a massive €1bn five-acre city centre retail and residential empire led by financier Niall McFadden that was not to be.

It achieved debt restructuring with Anglo and Ulster in 2010 but ultimately it could only stave off bank control, not avoid it, and in 2011 as the retail market plummeted, it was taken over by the banks.

Sunday Independent

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