Mothercare PLC (LSE:MTC) has secured an agreement with its pension trustee to extend the deferral of pension contributions until March 2026, covering £3 million due for the current financial year.
The company said the arrangement would ease short-term cash flow pressures while it explores growth and strategic opportunities.
The specialist retailer also noted it had breached the liquidity covenant on its £8 million debt facility, making the loan technically repayable on demand. However, the lender has continued to show support and has not requested immediate repayment.
"The board of Mothercare is very grateful for this significant support that both the group’s pension trustee and our lender have provided," the company said.
"This deferral and forebearance allows the company to focus on, evaluate and conclude the multiple ongoing strategic discussions with greater flexibility as we seek to restore critical mass, especially in the UK market."
A new contribution schedule will be agreed by March 2026, with payments set to resume from April at a level the trustee considers affordable.
Mothercare added that it continues to evaluate options to reduce its pension deficit.