The $280 million revolver for U.K.-furniture group Courts has been weaker in trading as the company reviews its options with lenders amid rumors of a takeover by Schottenstein Stores Corp.'s European arm, SB Capital. Reportedly, SB Capital would acquire the debt and then exchange it for equity. The loan has dropped to the low 60s from the low 70s, where it was quoted three weeks ago.
Courts' revolver is led by The Royal Bank of Scotland, HSBC, Scotia Capital and Barclays Capital (LMW, 8/2). The company has hired investment bank Close Brothers to review its options.
A source familiar with the company said the U.K. furniture market has been sluggish. Courts has also had company-specific problems, such as problems with products and merchandising, supply chains, and labor supply. Asset sales, debt-to-equity swaps and a business turnaround are all possibilities, said the source. However, given the company's current debt levels, "The lenders will have a significant say in the business going forward," he remarked.
"The new management team is conducting a full review of every element of the business and will be setting out their detailed recovery plans to turn around the business with the interim results at the end of November," a Courts spokesman stated, declining further comment.