Local council lends THG founder £151m
A Cheshire Local Authority loaned The Hut Group (THG) owner £151m following its £5bn stock market flotation.
Warrington Council granted a £200m loan facility to Icon 3 Holdco, an investment company indirectly controlled by Matthew Moulding, according to a council report from July.
The company took three drawdowns totalling more than £151m.
The loan, which was first reported by the Financial Times and which was arranged by property firm CBRE, is secured against assets including various commercial properties, some of which are still being built around Manchester airport. The terms of the agreement were not disclosed.
While it is not unusual for councils to lend money, the Warrington facility is more than five times the size of any of the council’s other commercial loans.
As part of THG Flotation, the company sold off many of its property assets to Moulding, leaving it to pay its founder, chief executive and chairman £19m in rent annually.
Moulding defended the move at the time and had pledged all annual profits from his new property arm to charity.
Warrington Council said the loan was “not a new venture for Warrington and is a practice that has been evidenced as being well established for some time in local government across the UK”.
Warrington council remained within its overall “affordable borrowing limit” according to the July report.
The e-commerce giant is one of the world’s largest beauty and wellbeing businesses and last year raised £1.88bn in a huge UK flotation on the London Stock Exchange.
The float was the largest initial public offering (IPO) since 2013, comprising 376,273,998 shares in total, and led to chief executive Matthew Moulding receiving £830m in shares – one of the biggest payouts in UK corporate history.
