Bloomberg SHANGHAI (Bloomberg) — House of Fraser Ltd. needs a new lifeline after a Chinese retailer pulled its plan to buy a majority stake, leaving the British department store chain on the brink of collapse and threatening about 17,000 jobs.
Would-be rescuer C.banner International Holdings Ltd. shelved plans to raise funds for the purchase of a 51 percent stake in the British chain, citing a plunge in its own stock price over the past month. The company had pledged to pump £70 million ($92 million) of fresh capital into House of Fraser after taking control from Nanjing Xinjiekou Department Store Co., a subsidiary of conglomerate Sanpower Group.
House of Fraser’s £165 million of bonds due in 2020 fell about 25 pence on the pound to a record-low 30 pence on Thursday, according to data compiled by Bloomberg. The company has total outstanding debts of £390 million, according to a June presentation.
EY is advising lenders and preparing a contingency plan in case House of Fraser collapses, according to two people familiar with the matter, who aren’t authorized to talk about it and asked not to be identified. Speech