Carlyle Commits £150 Million to Very Group in Strategic Refinancing
US private equity giant Carlyle has injected a substantial £150 million into The Very Group, the prominent online retailer, as part of a significant refinancing arrangement. This capital infusion represents a crucial step in stabilizing the debt-laden retail business, which has been under Carlyle's control since last year.
Background of the Ownership Transition
Carlyle initially served as the primary corporate lender to Very Group under the previous ownership of the Barclay Brothers. However, following the collapse of the Barclays' business empire in November last year, Carlyle seized control of the company. Simultaneously, Abu Dhabi-based media operation IMI, which had previously attempted to acquire The Telegraph newspaper group from the Barclays, also became a major lender as part of the transition. Both Carlyle and IMI assumed ownership of Very Group during this period, while the Barclay family now faces bankruptcy petitions from various lenders.
Details of the Refinancing Agreement
The £150 million investment involves Carlyle converting a portion of Very's existing debts into equity, thereby providing fresh capital to the retailer. This move is part of a broader refinancing package that includes the extension of several key loans. Specifically, Very Group has successfully extended its UK securitisation facility until February 2029 and its £150 million revolving credit facility until 2030. These extensions are designed to provide the business with greater financial flexibility and long-term stability.
Statements from Very Group Leadership
Edward Fry, Chief Financial Officer at The Very Group, emphasized the positive implications of the refinancing deal. He stated, "Securing this long-term funding reflects the confidence of our lenders in the strength of our business. The combination of extended maturities, improved margins, and further deleveraging provides a stable platform for continued investment in our digital and customer proposition while maintaining a disciplined approach to balance-sheet management." Fry also highlighted that the £150 million capital support from Carlyle underscores the private equity firm's strong and ongoing commitment to the retailer's future.
Strategic Implications and Future Outlook
The refinancing deal is expected to significantly strengthen Very Group's capital structure, positioning the company for the next phase of its growth. Very Group, which sells a wide range of products including clothing, electricals, and toys, aims to leverage this financial stability to enhance its digital offerings and customer experience. Despite this injection of capital, Carlyle continues to explore potential sale options for the Very Group, indicating that the refinancing may also be a step toward making the business more attractive to prospective buyers.
This development comes at a critical time for the retail sector, where online players face intense competition and economic pressures. The investment from Carlyle not only provides immediate financial relief but also signals confidence in Very Group's operational resilience and market position.
