Mothercare trustees agree to payment schedule

Mothercare has agreed a revised payment schedule with its pension scheme trustees, reducing contributions over the next 15 months.

It was agreed as part of the transformation of the parent company, Mothercare plc, following Mothercare UK’s (MUK) fall into administration.

The company was able to secure the revised payment schedule following the completion of the placing of £3.2m new equity and the issuance of an additional £5.5m tranche of convertible unsecured loan notes.

In December 2019, MUK announced that its two defined benefit pension schemes and their members would be safeguarded.

The schemes will be moved from MUK and assigned to a subsidiary of the company and new legal entity, Mothercare Global Brand (MGB).

MUK reached an agreement with its administrators, PwC, to assign the brand and re-contract “the majority” of the firm's international franchise agreements to MGB, including all liabilities in respect to MUK's DB schemes.

The firm also announced that its chief executive officer, Mark Newton-Jones, has stepped down, with chief financial officer Glyn Hughes becoming interim chief executive officer.

Commenting on the announcements, Mothercare chairman, Clive Whiley, said: "As we approach the completion of our transformation plan, Mothercare once more has a brighter future ahead as a solvent and cash generative group.

“We have made good progress with the transformation plan and the risks to achieving the outcomes we laid out in November are increasingly dissipated.

“Our plans for the final steps of the recapitalisation of the group are in hand and whilst the cash realisation from the MUK administration was lower than anticipated, the progress that we have made elsewhere means that the financing requirement overall is unchanged from our original plans.”

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