Arcadia Group’s seven company voluntary arrangements (CVAs) have been passed.
Arcadia Group’s seven company voluntary arrangements (CVAs) were narrowly approved this week.
The CVAs achieved the 75% support Arcadia needed at a vote on Wednesday afternoon despite the group’s biggest landlord intu voting against them.
Under the terms of the CVA, 23 stores will close and rents will be cut across 194 of Arcadia’s 566 stores in the UK and Ireland.
As part of the CVA, Arcadia’s majority shareholder, Lady Tina Green, will also invest £50m of equity into the group.
Last week, Arcadia was forced to delay the vote on the CVAs and offer landlords concessions to secure their approval for the rescue plan. The proposed rent cuts were scaled back and break clauses in the leases were extended.
Despite this, Moody’s vice-president Ramzi Kattan described the vote result as a “credit negative” outcome for retail landlords.
“Retail property owners face continued weak operating performance, with declining footfall and retail sales, and downward pressure on rents,” he added.
An intu spokesman said the revised rescue deal was unfair on its other tenants.
“We firmly believe that the terms of the Arcadia CVA are unfair to our full rent-paying tenants and not in the interests of any of our other stakeholders, including intu shareholders and the 130,000 people whose jobs rely on the success of our prime shopping centres,” the spokesman said.
After the creditors’ meeting, Sir Philip Green expressed his satisfaction at the result of the vote.
“I think it’s a good result,” he said. “Everybody worked extremely hard, and we had fantastic support from our suppliers and our wonderful staff. At the end of the day, more landlords voted for it than voted against it. Let’s take this in tonight and move forward tomorrow.”