Blacks Leisure, the outdoor clothing retailer, has revealed plans for a company voluntary arrangement (CVA) for its subsidiary The Outdoor Group, a debt for equity swap with its bank and the administration of Blacks Outdoor Leisure Limited.

The news follows last month's announcement of the administration of its Sandcity arm.

The CVA will involve 101 landlords of retail stores which are either closed or in the process of closing, as well as around nine landlords with guarantees given to them by the company on stores.

The CVA will also include the request to alter terms on 291 leases of stores to permit monthly rent payments for the period of 18 months from the next rent payment date.

Blacks said the chain will continue to operate as a going concern while the process is being worked through.

Blacks will make available £7.25m for the landlords affected, to be paid in two instalments. The first instalment from 50% of the fund will be paid in May 2010 and the second in July 2010.

The detailed terms of the CVA proposal will be made available to landlords and creditors this week.

Blacks has also arranged a new bank facility with Bank of Scotland Corporate, part of Lloyds Banking Group, which comprises an extension to 23 December 2009 of the existing standstill agreement announced on 23 September 2009. Subject to shareholder approval, Blacks has agreed to issue warrants to Bank of Scotland Corporate which will entitle the bank to acquire new ordinary shares in the company equal to around 5%.

As part of the wider restructuring of Blacks - Blacks Outdoor Leisure Limited will be put into administration today. The subsidiary is the tenant of two leases for trading retail stores.

Blacks also plans for its non-trading subsidiaries Blacks Camping and Leisure Limited and Outdoor Stores Limited to enter creditors voluntary liquidation.

Blacks Camping and Leisure is the tenant of a lease of one of the group's closed retail stores and Outdoor Stores Limited has a small intra-group receivable, holds four dormant subsidiaries and is the guarantor of the leases of four closed stores.

Neil Gillis, chief executive, said: "After several years of losses Blacks embarked on a turnaround plan in early 2008. That plan successfully reduced the cost base of the business, reduced our working capital requirements, improved retail standards and created a successful new retail format. However, the severity of the current trading environment and the drag of the loss-making Boardwear business has required a more radical set of measures to complete the turnaround of this business. The restructuring plan announced today and the new banking facility supporting it provide a realistic opportunity to ensure the survival of the core outdoor business which has the potential to become a strong successful retailer."

KPMG is advising Blacks.

Richard Fleming, UK head of restructuring at KPMG, and proposed 'supervisor' of the CVA, said: "The proposed CVA gives Blacks the opportunity to preserve 291 trading stores and around 4,300 jobs. The CVA proposal is asking the landlords of 101 unoccupied stores to come to a compromise on the company's financial liability. We believe the proposed CVA offers a fair balance between the operational needs of Blacks and the landlords’ rights under the tenancy agreements. The total compensation being offered to the landlords is £7.25m, which equates to approximately 6 months rent each. In addition and importantly, given the size of the potential liability, the group will continue to pay rates until the leases are surrendered or forfeited in consultation with landlords.”

Jones Lang LaSalle is advising Blacks on its property.