Focus plots CVA

DEBT-LADEN DIY chain Focus will outline details of a restructuring plan today that could safeguard its future.

The Crewe-based business wants to enter a Company Voluntary Arrangement (CVA) which will allow it to reduce its debts and interest payments without going into administration.

But it will require the consent of at least 75% of creditors.

The CVA process effectively saved Wigan-based retailer JJB Sports from collapse earlier this year.

Focus needs to convince the landlords of 38 closed stores to agree to the deal. The shops are understood to be costing the business 12m a year.

Under the terms of the CVA landlords would receive two lump-sum dividends in return for losing rent and Focus would save around £8.6m. A vote on the CVA will be held on August 24.

Crewe-based Focus is heavily debt-laden. It was bought by American private equity firm Cerberus in 2007, which paid £1 for its equity and assumed £225m in debt.

After predicting a 10% fall in sales in 2009, retail veteran Bill Grimsey, who has previously led Wickes and Iceland, took drastic measures, including cutting the workforce by 700.