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Robert Dyas in debt for equity swop

James Hall - Retail Editor

Robert Dyas, the hardware chain, has secured its future after agreeing a debt-for-equity swap that hands a majority stake in the business to its lenders.

The 99-store chain has also appointed former Kingfisher and Allied Carpets director Geoff Brady as its chairman.

The retailer, which is based in Leatherhead and was bought by its management earlier this year, has arranged the refinancing agreement in order to more than halve its debt liabilities and radically reduce its annual borrowing costs. Its debts have now been reduced to £15m and annual borrowing costs cut by nearly £2m.

In return Robert Dyas's lenders – Allied Irish and Lloyds Banking Group – have taken a majority stake in the chain. Despite this, they have not got a controlling interest in the retailer in terms of voting rights.

"The ability to secure new banking arrangements is a significant vote of confidence in the group and provides a firm footing from which to move forward," said Steven Round, Robert Dyas's chief executive.

Details of the refinancing deal came as the chain said that second-quarter, like-for-like sales rose by 3.5pc. It added that earnings were also ahead of last year.

Mr Round said that recent trading had been "resilient". "We remain committed to retaining our unique position on the high street," he said.

Robert Dyas, which employs 1,250 people, was bought by its management team earlier this year. It was previously owned by Change Capital, the private equity group.

Mr Brady, whose entry as chairman was revealed in Retail Week magazine, was a former non-executive director of Matalan, the clothing retailer. He is a current non-executive director of Carpetright, the floorcoverings retailer.

Robert Dyas also said that Graham Coles and Phil Green, finance director and commercial director respectively, are joining the board

11 September 2009
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