West Coast signs equity deal

Deputy Business Editor

Thursday 25 October 2012

SIR Tom Hunter's West Coast Capital has completed a £151 million debt for equity swap to strengthen its financial position.

STRENGTHENING: Sir Tom Hunter has overseen a deal which is part of a reorganisation of finances.

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Greig Cameron Deputy Business Editor

The deal is an internal reorganisation of the group's finances in which debt owned by West Coast Capital is converted into further shares. The transaction is revealed within accounts published for retail arm West Coast Capital Trading.

A spokesman for West Coast Capital said the change puts the group in a "very positive long-term position".He added: "De-leveraging the balance sheets by converting debt to equity puts us in the enviable position of being able to hold assets and sell at a time – and price – that suits us."It is thought main backer Lloyds Banking Group does not hold a stake in West Coast Capital but remains supportive.Accounts recently filed at Companies House show the key West Coast Capital companies reported mixed results. Retail arm West Coast Capital Trading reported a £16.4m pre-tax loss in the 12 months to January 31, 2012, during a period when the 38-unit USC clothing and footwear chain was sold to Sports Direct. The accounts show £4.6m of the loss is attributed to the disposal of subsidiaries much of which is thought to relate to USC.The loss at West Coast Capital Trading was against a £28.2m profit the previous year, although that figure was mainly due to a £56m gain on the £150m sale of the Office shoe chain in December 2010.Turnover in the most recent accounts declined from £212.4m to £24.4m although income from continuing operations increased from £584,000 to £773,000. Net debt increased from £235.6m to £239.6m. Write-downs on investments were significantly lower, coming in at £1.8m, compared to £37.6m the previous year. The Trading business had net liabilities of £201.9m but a note in the accounts said directors had prepared cash flow projections to show it could trade within its current facilities so the accounts were prepared on a going concern basis.West Coast Capital continues to have retail interests such as House of Fraser but has mainly moved out of traditional operations although Sir Tom still privately holds a number of retail investments.In abbreviated accounts investment arm West Coast Capital Holdings, which has a number of property ventures, reported a near £24m retained profit.On the balance sheet, the profit and loss account reserve went from a deficit of £50.6m to a shortfall of £26.8m mainly due to "strategic disposals" in the 12 months to March 30, 2012.The value of fixed asset investments declined slightly from £213.6m to £211.4m.West Coast Capital is also keen for Chancellor George Osborne to re-think his economic strategy.A spokesman added: "We are generally pleased in a return to profit in what everyone acknowledges is a very difficult market. "The economy remains perilously fragile and we believe the Government's austerity measures have gone too far – the economy needs stimulus and we'd hope the forthcoming Budget will provide the shot in the arm needed to spark recovery."

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West Coast signs equity deal

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