MFI agree £150 million banking deal

TROUBLED MFI agreed a new £150 million banking facility to fund its turnaround.

The agreement, which is for 39 months, followed talks with bankers over future funding arrangements as the furniture group battled rising debts and a pension deficit of around £200 million.

MFI said the deal was backed by the Pensions Regulator and allowed the company to focus on its recovery plan.

MFI chief executive Matthew Ingle said: “This is good news for MFI. The new facility will allow MFI to focus on its turnaround plans for UK retail and the growth of Howden.”

The £150 million facility was underwritten by Burdale Financial, part of the Bank of Ireland, and Lloyds TSB Commercial Finance.

Earlier this week MFI eased fears about the cost of any future restructuring by selling its French business Hygena Cuisines for £92 million.

The sale allayed market worries that the troubled company faced having to issue new shares in a rights issue, a fundraising exercise which would hit the value of existing shareholdings.

The City is braced for MFI to make a small loss when it announces its results for 2005 on February 28. There have been reports of a poor post-Christmas sale and signs that its joinery business Howden had struggled recently after strong growth in recent years.