Phase Eight reassures staff after polemical refinancing

ANALYSIS_ Private equity firm TowerBrook has had to reassure Phase Eight´s staff after getting into a highly criticised 5-year refinancing plan. The womenswear chain´s owners will benefit from a further 90 million pounds loans onto the loss-making retailer.

As reported by ‘The Sunday Times’, Private equity firm TowerBrook, owner of Phase Eight, has loaded the fashion retailer with an extra 90 million pounds debt so it can cash out a millionaire special dividend.

Soon

after TowerBrook had laden the retailer with a further 90 million pounds of loans, the private owner of Phase Eight has had to reassure the retailer´s staff over their investment in the brand, as pointed by sources close to the matter.

Phase Eight has to reassure its staff after criticised refinancing

Phase Eight, which refinancing has been inked with Barclays, argues that reports broken by media have fail to explain the real situation and that the refinancing will serve to the international expansion of the ailing retailer.

The refinancing plan, understood to be rolled out over five years to target emerging markets including the Gulf Countries and Russia, was met with despair and unbelief by the company´s employees, as Phase Eight´s reported a 4.6 million pounds pre-tax loss on sales up to 121 million pounds.

Before this refinancing was made public, the company had already to face 16.4 million pounds in debt-related interest payments.

TowerBrook Capital Partners acquired a back-then called “significant” stake in Phase Eight in early 2011. Although the value of the deal remained undisclosed, market insiders suggested it to be at around 80 million pounds. Phase Eight was previously owned by a consortium of investors led by obsolete Icelandic bank Kaupthing.