(Bloomberg) -- Bondholders to U.K. discount retailer Matalan have hired advisers as the company draws up plans to raise additional funding to cope with the impact of the coronavirus lockdown.
Creditors will work with financial adviser Perella Weinberg Partners Group LP and law firm Kirkland & Ellis LLP in the coming weeks, Matalan said in a statement Monday. The retailer said it's too early to specify the amount of funding required but guided that 60 million pounds ($74 million) could be sufficient to help the business get back on its feet.
Representatives for Perella and Kirkland didn't immediately respond to emails seeking comment on their appointments.
Matalan has been hard-hit by the forced closure of its stores in the U.K., placing more than 90% of its employees, over 11,000 people, on furlough. The company has fully drawn its revolving-credit facility for the first time and waived covenants with lenders.
Its bonds have plummeted in recent weeks. Matalan's 350 million pounds of senior secured notes due 2023 are quoted at 55 pence, down from 93 pence in February. Its 130 million pounds of of unsecured bonds due 2024 are quoted at just 26 pence.
Matalan is in talks with two of its RCF lenders to provide a loan of up to 50 million pounds which would receive an 80% government guarantee under a coronavirus support program, the company said Monday. If the lenders choose to proceed with this financing, it will rank alongside Matalan's most senior debt and the company must seek bondholders' consent to put the funding in place.
The optimal amount of debt for Matalan is about 200 million pounds to 250 million pounds, analysts at Barclays Plc wrote in a note to clients last week. The company's lower-ranking bonds could be fully converted into equity in a restructuring, the analysts wrote.
Matalan is already working with Deloitte and law firm DLA Piper on its debt, Reorg reported last week. A spokeswoman for DLA Piper confirmed that Matalan is a client but declined to comment further while a Deloitte spokesman declined to comment.
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