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Mothercare secures £19mln loan to complete transformation plan after slumping to interim loss

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Mothercare PLC (LON:MTC) announced it has secured a £19mln loan with Gordon Brothers Brands among other measures to complete its transformation plan after slumping to an interim loss.

The baby products seller said it will use the proceeds to repay outstanding amounts due under its revolving credit facility, while it also reached an agreement with the trustees of its defined benefit pension schemes as to revised deficit payments for the next five years.

READ: Mothercare sees 39% sales decline in financial year to date

It has also agreed with the holders its £13.5mln convertible unsecured loans committing to convert these to equity on January 31, subject to certain conditions including the relisting of the group onto AIM.

In its final results, the retailer forecast full-year net worldwide retail sales of at least £320mln, down from £542mln in the previous period, and to make a “small” underlying loss.

Group revenue is expected to return to more normal levels in the short to medium term, reflecting the higher average birth rates in a number of its core markets, the company said.

In the 28 weeks to October 10, the firm slumped to a loss before tax of £14mln from last year’s profit of £5mln, while total revenue tanked 56% to £44mln due to worldwide lockdowns.

Shares added 3% to 13p early on Thursday.

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