Mothercare announced last week that it has begun discussions with its lender to change, renegotiate, or refinance its debt facility due to higher interest rates.
The brand said it is also considering various financing alternatives, including equity and equity-linked structures, to gain additional flexibility and reduced cash financing costs.
Mothercare said that high interest rates on its loan, coupled with a delay in the return to the sales level of pre-Covid, particularly in Middle Eastern markets, has meant the group may need waivers to future periods’ covenant tests.
The group also said that at the end of its financial year to 25 March, its total cash had dropped to £7.2m, compared to £9.2m the previous year.
