April 24, 2018 / 8:07 AM / a month ago

Meditor Capital raises stake in UK's Carpetright to almost 30 percent

(Reuters) - Hedge fund Meditor Capital Management, already Carpetright’s (CPRC.L) biggest shareholder, has raised its stake to just under the threshold at which it would be required to make a formal takeover offer for the struggling British retailer.

FILE PHOTO: A sign hangs above the door of a Carpetright store in Derby, Britain January 19, 2018. REUTERS/Darren Staples

Meditor’s move comes ahead of a meeting scheduled for Thursday where Carpetright’s creditors and landlords will vote on a restructuring plan.

Meditor increased its holding in the floor coverings retailer to 29.99 percent from 16.47 percent, a regulatory filing showed on Monday.

Last month it raised its stake from 12.29 percent.

Carpetright this month said it would seek creditor approval for a Company Voluntary Arrangement (CVA). The plan involves the closure of 92 stores and rent reductions at 113 others. Up to 300 jobs could go.

Meditor could not be reached for immediate comment. A spokesman for Carpetright declined to comment.

Carpetright shares are down 85 percent year on year after a series of profit warnings.

    The stock was down 1.4 percent at 37 pence at 1034 GMT, valuing the business at 26.1 million pounds.

    In March, Carpetright agreed a 12.5 million pounds unsecured loan with Meditor in exchange for new shares to fund short-term working capital.

    If the CVA is approved on Thursday, Carpetright will seek to raise a further 60 million pounds through an equity issue partly to fund the restructuring plan.

    With UK consumer spending under pressure, Carpetright is not alone in finding the going tough.

    This year Toys R Us UK, electricals group Maplin and drinks wholesaler Conviviality have gone into administration, while fashion retailer New Look is also closing stores.

    On Monday, British windows and doors retailer Safestyle UK (SFES.L) warned on 2018 revenue and profit.

    Reporting by Noor Zainab Hussain in Bengaluru, additional reporting by Maiya Keidan and James Davey in London; editing by Simon Jessop and Jason Neely

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