Woolworths has managed to negotiate new debt agreements in Australia, reducing the risk its borrowings once posed to its SA business. This comes after it sold a second property in Sydney
Woolworths, owner of Australian clothing chain David Jones, has sold its flagship Elizabeth Street store in Sydney for a maximum ofWoolworths has struggled with debt since it bought Australian retailer David Jones in 2014 for about R21bn and wrote off more than R12bn. Woolworths owns a separate, more profitable retail company in Australia, Country Road Group, which, under an agreementThis created a risk that, if the ailing retailer failed, it could drag Country Road with it and efforts to save the Australian business could then strain the SA business.
CEO of All Weather Capital, Shane Watkins, explained to Business Day previously that “a complete write-off of Australia risks eliminating a material portion of the equity in the SA holding company, this despite the remaining SA operations being high-quality, profitable and very cash generative”. Woolworths’ Australian borrowings equaled A$420m in debt at the end of the 2019 financial year. It sold its first retail property for A$121m earlier in 2020 as it implemented a plan to sell all four buildings it owns Down Under.enter into agreements with lenders, ensuring David Jones and Country Road, are individually financed and old debt guarantees are cancelled.
Does that mean Moir gets an even bigger bonus ? 🙄