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Last ditch talks to save Robert Dyas

By Mark Kleinman

Last-ditch talks involving the taxpayer-backed Lloyds Banking Group were under way on Saturday night to avert the collapse of Robert Dyas, the high street hardware chain, in a bid to salvage more than a thousand jobs.

Change Capital Partners, the private equity firm which owns Robert Dyas and which is likely to see its investment wiped out as part of any restructuring, is locked in discussions with Lloyds and Allied Irish Bank (AIB), the chain’s principal lenders, about a new financing deal.

People close to the talks said on Saturday that unless a deal could be reached imminently, Robert Dyas’s owners would have no choice but to place the company into administration, jeopardising up to 1,200 jobs.

Last night, it emerged that Change Capital Partners, which is run by Luc Vandevelde, the former Marks & Spencer chairman, and Lloyds had been engaged in a bitter stand-off over the future of Robert Dyas, which operates from more than 100 stores across southern England.

In a letter sent on Friday to Eric Daniels, Lloyds’ chief executive, headed “urgent and unnecessary administration”, an executive at Change Capital Partners accused Lloyds and AIB of refusing to negotiate over a series of offers tabled by the private equity group, including the injection of new equity and a debt-for-equity swap.

According to the letter, a copy of which has been seen by The Sunday Telegraph, Lloyds and AIB had been stalling on agreeing new lending terms for seven months.

“As a 'last ditch’ effort, the directors have asked Lloyds/AIB for support that would allow them to avoid putting the operating company into administration,” said the letter. “This has been rejected and the directors are being asked to serve notice of intention to file for administration for the 'top companies’ today and for the operating company on Monday.”

The letter was written by Roger Holmes, the former chief executive of M&S, who is now a managing director at Change Capital Partners.

It appeared on Saturday that the prospect of a collapse of the chain as soon as tomorrow had receded after Lloyds and AIB agreed to enter fresh negotiations about Robert Dyas’s banking facilities.

However, it remained likely that the Robert Dyas holding company would still be placed into administration.

In a statement, a Lloyds spokesman said: “We are supportive of Robert Dyas and are working with the management to ensure that the operating business continues to trade profitably.”

Last month, Robert Dyas recruited a high street turnaround specialist to help it secure the company’s future and negotiate new terms with landlords.

However, the chain is understood to have recorded like-for-like sales growth of 3pc over the last three months.

Lloyds’ involvement as the principal lender to Robert Dyas is particularly sensitive because it is 43pc-owned by the taxpayer.

Change Capital Partners declined to comment

04 April 2009
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