Edcon gets some breathing space
A deal with stakeholders might give Edcon the room it needs to turn itself around — but the retail market remains challenging
Edcon is at a turning point yet again. The retailer — which operates the Edgars, Jet and CNA chain stores — has just wrapped up a deal with 250 stakeholders, including its shareholders and landlords, in a bid to keep its doors open. The deal, concluded in December, will allow Edcon to renegotiate its store leases and bring in new shareholders. It follows one done two years ago in which creditors converted the bulk of Edcon’s R26.7bn debt into shares. On December 11, Edcon wrote to its landlords, asking them for a two-year "rent holiday" of 41% for all its 1,350 stores. In exchange, they would get a 5% stake in Edcon. The letter said that Edcon’s existing funders would convert R9bn of their debt into equity, while injecting another R700m. Then the Public Investment Corp will inject another R1.2bn into Edcon. Still, Edcon has not yet announced what the final terms of its restructuring deal were. The retailer says it is starting to get the mix of product and pricing right. "Much of the...
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