(Reuters) – Struggling British retailer Carpetright <CPRC.L> said on Tuesday its biggest shareholder, hedge fund Meditor Capital Management, will buy its 40.7 million pound line of credit from its lender.
Meditor owns just under 30% of Carpetright, a threshold at which it would be required to make a formal takeover offer.
“Meditor has confirmed it now intends to engage with the Company with a view to providing a more stable and longer-term funding platform,” the floor covering retailer said.
Last year, Carpetright’s shareholders backed a restructuring plan to keep the company alive. The plan closed 80 underperforming stores, while 23 were retained on a nil rent basis.
The company said Meditor will also buy full participation interest with NatWest and Ulster Bank related to its 6.5 million pound overdraft.
Meditor did not propose board representation or request for structural changes in the business as part of the overdraft agreement, Carpetright said.
Shares of the company rose 11% at 15.24 pence in early trade.
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Arun Koyyur)