Talks with financing partners in accordance with normal practice: Mothercare
British maternity & baby products retailer Mothercare has refuted media reports that the group is suffering a heavy debt problem, which forced it to renegotiate loan terms with its lenders.
Stock in Mothercare slipped by as much as 4 per cent to 180.00p apiece in early trading on Tuesday after some media reports claimed that the group was asking Barclays and HSBC for a breathing space to pay back its loans of £90 million ($153 million) that were secured by it around seven months back.
But, the retailer claimed that its talks with financing partners, including Barclays and HSBC, were in accordance with normal practice; and that its underlying profit and debt were expected to be in line with its guidance.
Responding the media reports, "As confirmed in the Q4 Trading Statement issued on 10 April 2014, underlying profit before tax for the year ended 29th March 2014 is expected to be in line with current market forecasts, and net debt is also expected to be in line with previous guidance."
It added that it expected to remain in compliance with the covenants and provisions of its facilities.
In February 2014, Mothercare announced the surprise exit of its CEO Simon Calver. The departure was announced just a month after the retailer issued an annual profit warning. But, the retailer didn't specify any reason behind Mr. Calver's surprising exit.
Mothercare shares have shed more than half (56 per cent) of their market value since the start of this year.