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Landlords will be asked to back CVA plan later this month
Carpetright will ask creditors to back a CVA that would see it this autumn close 81 stores, on top of 11 that have already ceased trading, and cut rents on a further 113.

The UK's largest floorcoverings retailer says it has finalised the terms of a CVA (Company Voluntary Arrangement) which is "intended to restore the viability of the group's business model."

Save for landlords compromised by the CVA, the proposal will not affect claims of any other creditors, the company said.

"We’re announcing today some tough but necessary steps to address our legacy property issues and restore our profitability. We are launching a CVA proposal that, if approved, will result in the closure of 81 poorly located or over-rented stores, from a UK total in excess of 400, later this year. Planned closures will not affect our customers, all orders will be fulfilled either by the original store or a neighbouring Carpetright where necessary.

"Regrettably, we expect this will mean that around 300 colleagues would leave the business but we will make every effort to find alternative roles for those affected wherever possible. We’re also announcing that we plan to follow the CVA with an equity financing to raise £60m of new funds to invest in our stores and online offer, to strengthen the competitive position of the ongoing business.

"It’s important to stress that throughout the CVA process, we will continue trading as normal and customers can continue to shop with Carpetright with confidence. We do not expect the proposed stores to close before September 2018."

Carpetright will seek approval from creditors for its plan on April 26 with the hoped-for deal to be rubber-stamped by shareholders April 30.

As it previously announced, it will then to look raise about £60 million from an equity capital raising exercise in May, which will be used to fund "ongoing strategy, reduce indebtedness and cover the costs associated with the CVA."

The full list of the remaining 81 stores it could close by the end of September 2018 — on top of those already closed — is below.

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