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Homebase exploring CVA options

Homebase Bingley

Sources close to Homebase have told the Press Association that restructuring experts at Alvarez & Marsal are being scouted for a possible CVA, alongside a range of other options.

However, it is thought that Homebase’s management is cautious about the prospect of a CVA because the process is so controversial with creditors, especially landlords, without whose support, the CVA would not be possible. The property industry has recently expressed outrage at the controversial process, saying it leaves them out-of-pocket.

As part of Hilco Capital's plans to turn around the struggling business, the UK's third largest DIY chain with 238 branches, the company's advisers are looking into the Company Voluntary Agreement, a controversial insolvency procedure that has recently been adopted by the companies including House of Fraser and Carpetright.

It's understood that the company is also exploring a second wave of store closures, part of the 40 stores identified for closure by Wesfarmers back in February.

Read - Wesfarmers could close up to 40 stores.

Only last week, the business axed 303 jobs at its head office in Milton Keynes.

Read - 300 jobs to go at Homebase Head Office.

Homebase was bought by Australian conglomerate Wesfarmers for £340million in 2016 and after only 2 years of ownership the company decided to exit the UK business, selling to turnaround experts Hilco Capital for £1.

It's understood that the rebranding of the 24 Bunnings stores back to Homebase will commence in July.

The company declined to comment.

Source: Insight DIY Team

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01 July 2018

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