Edcon starts talks on capital-restructure plans

28 May 2015 - 12:41 By Janice Kew
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The Edgars store in Melrose Arch, Johannesburg.
The Edgars store in Melrose Arch, Johannesburg.
Image: Courtesy of Edcon

Edcon Holdings (Pty) Ltd. named Goldman Sachs Group Inc. and Houlihan Lokey as advisers as it started talks with bank lenders and 2019 noteholders on capital-restructure plans.

The talks include “new debt financings and or transactions involving our existing debt,” the company, owned by US private equity firm Bain Capital Partners LLC, said Thursday in a statement. “These discussions are proceeding constructively, but there can be no assurance at this time that they will be successful.”

Edcon needs to start repaying about R4.5 billion of debt denominated in euros, dollars and rand next year, with another 20 billion rand due by 2019, according to data compiled by Bloomberg. Edcon, which has more than 1,500 stores across fashion chains including Edgars and Jet, has been cutting jobs to try to stem losses.

Retail sales rose 2% to R27.5 billion in the 52 weeks through March 28, the company said. That compares with a 5.1% gain a year earlier. Credit sales fell 8% and the slump “continues to delay meaningful growth of the business,” Edcon said.

Edcon’s 425 million euros ($464 million) of bonds due June 2019 dropped to as low as 15.2 cents on the euro from 37.7 cents at the start of the year, according to data compiled by Bloomberg. The notes traded Thursday at 25.1 cents.

 — With assistance from Renee Bonorchis in Johannesburg and Luca Casiraghi in London.

 

- Bloomberg

 

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