Friday 29 Mar 2024
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KUALA LUMPUR (March 16): UK-based Laura Ashley Holdings plc, a 35.17%-owned associate of Malayan United Industries Bhd (MUI Group), is in talks with British financial investment firm Hilco Capital to raise £15 million (RM79.56 million) by the end of this month, according to a report by UK’s Sky News.

In its March 14 report, SkyNews wrote that Hilco, the former owner of UK-based music and film retailer HMV, is in “advanced negotiations about the emergency loan to Laura Ashley”.

“Unless the funding materialises within the next fortnight, the chain, which trades from more than 150 British stores, risks collapse by the end of the month.

“Administrators are expected to be put on standby in the coming days pending the outcome of the talks with Hilco,” the report read.

Laura Ashley, which is listed on the London Stock Exchange, announced last Friday that it was in “advanced discussions with a third-party lender to provide facilities of up to an additional £15 million to meet the group's working capital requirements”.

“The process is being managed by Arrowpoint Advisory and the debt funding will need to be in place by no later than the end of March 2020.

“If the group is unable to secure commitment for the requisite level of funding by the end of March to satisfy its ongoing working capital requirements and turnaround plan, then the company will need to consider all appropriate options,” it said.

Laura Ashley previously explained in its interim results released last month that there had been a reduction in the amount that the group could draw down under its debt facility with its incumbent lender, Wells Fargo.

Compared with its closing price of 20 sen a month ago, MUI shares have declined 43% to 11.5 sen today, giving it a market capitalisation of RM351 million, as negative sentiment driven by the Covid-19 outbreak weigh on equity markets worldwide.

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