Brait receives Iceland cash


Brait receives Iceland cash

Published Date: 2020-09-17 | Source: Stephen Gunnion | Author: Stephen Gunnion

Brait receives Iceland cash

The investment group says members are returning to its Virgin Active gyms while food group Premier has had a strong first half.

Brait's shares rallied over 10% yesterday after it received the final payment for its Iceland Foods sale and said proposals to recapitalise New Look had been given the go-ahead.

The investment group said the buyers of its 63.1% stake in Iceland had paid over the remaining £48.5 million after it gave them a discount in return for early settlement. The disposal of its controlling interest in the food retailer is part of a five-year plan aimed at maximising value through asset disposals.

Meanwhile, a company voluntary arrangement (CVA) proposal launched by New Look was approved by more than the 75% of its unsecured creditors. Brait will provide its 18.3% pro-rata share of £40 million of new capital for New Look in a debt-for-equity swap, using the £4.1 million in interest coupons it received on its senior structured notes in January as well as a further £3.2 million. Under the CVA, it said New Look would be able to re-base its leasehold obligation, resulting in a reduction in rental costs through a turnover-based model that fairly reflected its future performance prospects.

Brait said the majority of its Virgin Active health clubs globally had reopened, with strong usage levels in those countries that were first to open including Australia, Singapore, Thailand and Italy. Usage levels in the UK and SA were at 53% and 35% respectively. However, it said its SA gyms had shown a significant increase in the three weeks that they had been open.

A strong first-quarter performance at Premier, the SA food group it owns, had continued into the second quarter, with revenue up 12% and earnings before interest, tax, depreciation and amortisation (EBITDA) rising 20% year to date. It said this was driven by strong volume and market growth in addition to a tight control on operating costs.

Brait's shares closed 10.5% up at R3.47.

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