House of Fraser rescue 'on track' says boss

Chairman Frank Slevin said the plans for a company voluntary arrangement, or CVA, with its lenders and landlords were "on track".

And the company dismissed speculation that talks had run into trouble as "inaccurate and unhelpful".

House of Fraser's collapse would endanger 17,000 staff across its 59 stores, including Beatties in Wolverhampton and branches in Telford, Shrewsbury and Birmingham.

Weekend reports claimed House of Fraser was locked in last-ditch talks with its lenders as the retailer scrambles to avoid a calamitous administration that would put thousands of jobs at risk.

The department store chain is expected to launch a store closure programme this week, but it was claimed the company was drawing up drastic contingency plans for an administration in case the CVA talks failed

A CVA would see House of Fraser cut a deal to reduce rents at some sites but also close some stores. It is not known which stores are at risk but it is thought up to 20 could face closure.

The House of Fraser CVA deal is crucial to a deal that would see Chinese group C.banner take a 51 per cent stake and pump fresh cash into the business.

In a statement, House of Fraser said: "It also continues to be the case that this transaction will see the injection of significant fresh liquidity into the business. House of Fraser is in close dialogue with its lending banks who are supportive of the company’s plans and the transaction with C.banner is progressing as expected."

C.banner signed a deal at the weekend approving the deal and is raising £124m on the Hong Kong stock exchange to help pay for it.

Mr Slevin said: “We are on track with our plans to enter the proposed CVA agreement. The funding news from C.banner is another important milestone in this complex process.”

“We continue to have very constructive talks with our banks and other stakeholders who are positive about the plans.”

Chief executive Alex Williamson added: "If we are to deliver a sustainable, long-term business supported by new liquidity then we need to make difficult decisions about our underperforming legacy stores.

"I am conscious that inaccurate speculation only feeds the ongoing uncertainty for my colleagues in the business and I reassure them we will share further news when we have it."

Weekend reports claimed House of Fraser was holding crisis talks with HSBC and the Industrial and Commercial Bank of China after the lenders expressed concern about the business' bid to secure the money from a new investor.

The lenders, advised by EY, were said to be demanding assurances that Hamleys owner C.banner will follow through on a promise of new funding when it takes a majority stake in the business.

It also suggested that House of Fraser's landlords had not been supportive of the CVA.

House of Fraser needs 75 per cent of creditors to back the plan, and has also been seeking the approval of the Pensions Regulator.