A UK home improvement retailer, owned by New York-based Cerberus Capital Management, is attempting to stave off administration by offering incentives to landlords.
According to a report by the Financial Times, the Cerberus portfolio company is to give up its leases to landlords for its closed stores and give them landlords a portion of a £3.7 million ($6.2 million; €4.3 million) “compensation fund” from its own resources.
The incentives are being offered via a “company voluntary arrangement” scheme that could save Focus £8.6 million overall, the report said.
Focus is also asking to pay rent on all remaining stores on a monthly basis, rather than quarterly, until 2011.
If the proposals are successful, then Focus would be able to stave of administration as the retailer’s lenders extend the terms of its debt. HBOS and GMAC would extend a £50 million revolving credit facility which expired at the end of 2009.
Cerberus bought Focus, once the third biggest DIY store in the UK, after it was put up for sale in January 2007 by private equity firms Duke Street Capital and Apax Partners.
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