DIY retailer MFI has posted a notice of intention to appoint administrators this week, as revealed in Property Week last week.

It is in the process of a management buyout and it hopes to save up to 100 better performing stores through a pre-packaged administration.

As Property Week revealed last week it is in emergency talks with its landlords and hopes many of its landlords will agree to a rent-free period for the next three months to ensure its survival.

The 194-store chain was bought from previous owner Galiform by Merchant Equity Partners in 2006.

Galiform said today in a stock exchange announcement that it is guarantor of the rent and associated costs payable under the leases of 46 properties occupied by the MFI Retail operations.

Galiform said it is not certain that if administrators of MFI Properties are appointed, liability for all 46 properties will revert to Galiform.

It said the annual net rentals for the 46 properties would be £14.7m, with associated net business rates of circa £6m and other costs potentially up to £2.5m a year.

Galiform said it had already engaged in extensive consultation with external property experts and as a result had ‘developed a detailed and thorough property-by-property plan to seek to mitigate the financial impact of it becoming liable for payments’.

It is thought Harvey Spack Field advises MFI.

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