DIY retailer considers Company Voluntary Arrangement
Focus is considering a company voluntary arrangement (CVA) in an attempt to secure the group's future.
According to The Sunday Times, Focus chief executive Bill Grimsey's advisers have also agreed in principle with the company's banks to renew a two-year credit facility, which runs out at the end of this year.
A CVA allows retailers to reduce their debts and interest payments without going into administration, but it requires the consent of at least 75% of creditors. Sports retailer JJB recently carried out a successful CVA, but other retailers attempting to do so have failed.
Focus was bought by American private equity firm Cerberus in 2007, which paid £1 for its equity and assumed £225m in debt. The company is understood to be ahead of budgeted sales for the past 12 months.
After predicting a 10% fall in sales in 2009, Grimsey made a number of changes, including cutting the workforce by 700.