Matalan’s Legal and Waterfall Analysis
Fri Jan 27, 2023 5:22 pm Financial Restructuring

The restructuring of U.K. retailer Matalan proposed by its first lien lenders will be implemented consensually, sources told Reorg. The first lien group will utilize the distressed disposal provisions (clause 14.2) contained in the intercreditor agreement, or ICA, to implement the transaction, which is due to close Jan. 26.

These clauses allow the security agent to release liabilities, guarantees and security provided the relevant criteria for a distressed disposal are met and any value protection safeguards are satisfied. Consequently, they are important contractual tools in helping to facilitate successful restructurings.

The group’s senior bondholders are resorting to their “fall back” option of taking over the group after second lien holders withdrew from the sales process and other bids fell short of expectations, as reported.

Reorg explains what the contractual tool entails and has run a cash flow and waterfall analysis with management’s business plan to test the sustainability of the post-restructuring capital structure.

To access Reorg’s legal and waterfall analyses on Matalan, request a trial.

Hear Reorg’s Europe team discussing Matalan’s recapitalization agreement in a recent podcast episode.

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