CR-2025-004622 - [2025] EWHC 2276 (Ch)

Fecha: 08-Ago-2025

The present problem

The present problem

These financial difficulties have now come to a head. The business as a whole is unable to pay its debts when due. There is an immediate liquidity shortfall of some £43 million, and although there will be a brief respite over the Christmas 2025 trading period, the negative cash flow will resume and rapidly lead to a shortfall of some £50 million. What is required to assure equilibrium is an immediate adjustment of some £54 million in the financial position.

A brief summary of the present funding arrangements is as follows:

(a)

the Plan Company, its holding company and one of its subsidiaries have the benefit of a secured term loan of £240 million granted by Blue Coast Finance Ltd (“Blue Coast ”). Blue Coast and the Plan Company are in the same ultimate beneficial ownership but are independently managed and run as two commercially separate entities (as the evidence of their recent mutual dealings establishes to my satisfaction). The facility is utilised and in default with some £271 million now due (inclusive of unpaid interest and fees).

(b)

The same borrowers have the benefit of a secured Revolving Credit Facility (“RCF”) also provided by Blue Coast. But this cannot be drawn because the borrower group cannot demonstrate financial viability over the next 12-month period, which is a condition of drawdown.

(c)

The Plan Company has an established banking relationship with Barclays, which has granted a £20 million unsecured overdraft facility. This provides essential working capital and does not form part of the intended restructuring. From July 2025 it has been guaranteed by Blue Coast.

(d)

The Group has foreign exchange contract arrangements with both Barclays and NatWest. These again are operationally essential and do not form part of the intended restructuring.

(e)

The Group has various supplier finance agreements (also now guaranteed by Blue Coast) enabling suppliers to be paid immediately by finance institutions which are then reimbursed by the Group. These again are operationally essential and do not form part of the intended restructuring.

A summary of the Plan Company’s other liabilities is as follows (in part arising under a Contribution Deed dated 20 June 2025):

(a)

there are liabilities for rent, service charge, insurance and other payments under the 223 leases of the business’s stores, headquarters and distribution centre, together with accrued or contingent liabilities for dilapidations;

(b)

there are liabilities for unpaid Business Rates in respect of those stores;

(c)

there are liabilities to general trade creditors (including liabilities arising from leases which have already determined).