Sports Direct International PLC (LON:SPD) founder Mike Ashley and Chinese-owned high street stores group House of Fraser (PRIVATE:HOF) have discussed a new investment deal for the struggling retailer, according to media reports.
The businessman, who already owns an 11% stake in the struggling department store, is said to have been asked to consider providing it with a £50mln loan, according to Sky News. The retailer's bankers are said to have held talks with Ashley's executives.
READ: House of Fraser store closure plan approved by creditors
In June, House of Fraser announced plans to close 31 of its 59 stores, putting 6,000 jobs at risk, and agreed on a loan extension plan with its lender.
However, a legal challenge has raised the prospect the rescue bid may fail, with the company voluntary arrangement (CVA) plans being challenged by House of Fraser’s landlords.
Another condition of its creditors extending loans was the retailer receiving £70mln from Hamleys owner C Banner, which is buying a 51% stake in the business and injecting in new capital.
However, that loan is reported to have been delayed by several months.
Days after the restructuring scheme was announced in June, Ashley won a legal challenge to obtain the store's business plans, providing him with vital information in the event of an investment bid.
Ashley bought his 11% stake in 2014 when 89% of the business was sold to Chinese conglomerate Sanpower in a deal worth £480mln.
The Sports Direct founder also has a 29.7% stake in department stores rival Debenhams PLC (LON:DEBS) and strategic investments in businesses including Goals Soccer Centres and French Connection.