Mothercare subsidiary Childrens World fails to get CVA approval
Part of Mothercare's restructuring plans has been put to a halt after it emerged that it did not get full support from creditors.
Shares in the company fell 6.5 per cent after lunchtime when the announcement was made.
Last week creditors voted to approve Mothercare's company voluntary arrangement (CVA), which is likely to result in the closure of up to 49 sites.
But it emerged today that the CVA for subsidiary Childrens World, which accounts for 21 stores in Mothercare's 152-strong portfolio, failed to get the necessary 75 per cent approval.
Creditors voted separately on CVA proposals for three subsidiaries of the Mothercare Group: Mothercare UK, Early Learning Centre, and Childrens World.
Although the first two received sufficient support, only 73.3 per cent voted in favour of the plans to restructure Childrens World.
The CVA for Childrens World will go no further, but the group plans to press on with the CVAs of its other two businesses and to continue the process of refinancing the company.
"KPMG have confirmed the votes relating to MUK and ELC CVA's passed by a clear majority, however it is now clear that the CVA of Childrens World was not carried by creditors by a narrow margin," said Clive Whiley, interim executive chairman.
"This will neither unsettle the UK Restructuring and Refinancing nor jeopardise our future transformation plans, which are already underway."
Childrens World was acquired from Boots in 1996. Its stores were later rebranded to Mothercare World stores.
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