Creditors of Blacks Leisure Group, the outdoor retailer based in the United Kingdom, voted overwhelmingly on a rescue plan that should allow the company to stay in business.
The company, which runs the Blacks Outdoor and Millets chains, said its proposal for a company voluntary arrangement (CVA), an insolvency process, was supported by over 97% in value of creditors who voted at meetings on Monday. That was well in excess of the 75% figure required for the proposal to succeed.
Under the terms of the CVA, landlords of 101 closed or closing shops will accept reduced payoffs. If the landlords had not passed the CVA, Blacks would have missed out on bank funding and would have had to enter administration.
A pot of ￡7.25 million (U.S. $7.25 mm) has been set aside to compensate just over 100 landlords of retail stores and other sites, equivalent to around six months' rent each. In addition the proposals include new terms for Blacks' remaining 291 stores to permit monthly payments for 18 months. The retailer has agreed new banking facilities of ￡42.5 million (U.S. 42.5 mm) with its lender Lloyds Banking Group as part of the plan.
Neil Gillis, Black Leisure's chief executive, said in a statement: "We are delighted with the overwhelming support the CVA proposals have received today, being passed almost unanimously with votes in excess of 97% in both cases. This outcome is a powerful endorsement by the creditors of the company that the CVA is in the best interests of all concerned. The process addresses a long-standing issue at the heart of the Group's difficulties in recent years - its tail of unprofitable stores - creating a significantly stronger business and, crucially, preserving over 4,000 jobs. With this support secured, we can now focus on realising the potential of the Group's market leadership position in outdoor retail once again."