House of Fraser’s (PRIVATE:HOF) crucial restructuring has received a boost after the troubled retailer settled with a group of landlords who had opposed the plan, according to media reports.
The group of landlords had filed petitions to Scottish courts in July against House of Fraser's Company Voluntary Arrangement (CVA) plan, which includes the closure of 31 of its 59 stores early next year.
READ: Billionaire Philip Day in early stages of potential bid for House of Fraser to save it from collapse: Sky News
House of Fraser said in a statement that it had settled the litigation to remove any risk to the discussions with investors that the company was trying to conclude.
The group of landlords said in a statement, "the terms of the settlement are confidential but we can confirm that we have agreed to withdraw our legal challenge to the CVA."
The struggling department store group's CVA was approved by its creditors in June, but the rescue deal has since been thrown into doubt after C.banner, the Chinese retailer which had agreed in May to buy a 51% stake in House of Fraser, last week cancelled a planned share placing that would have funded the deal and announced a profit warning.
In the wake of the C.Banner news, Sky News reported that billionaire retailer Philip Day was in the early stages of a potential bid for House of Fraser to save it from collapse.
Meanwhile, earlier in the week, it was also reported that Sports Direct International PLC (LON:SPD) founder Mike Ashley and House of Fraser had discussed a new investment deal for the struggling retailer.
The businessman, who already owns an 11% stake in the struggling department store, was said to have been asked to consider providing it with a £50mln loan, according to Sky News.