Santander Corporate Bank has provided a new £50 million committed debt package to Poundworld Retail Limited (“Poundworld”) a leading UK value variety retailer, to support its next dynamic stage of growth and store roll out plan.
Poundworld continues to have no material financial leverage and now benefits from the security of having enhanced and committed banking facilities. Earlier this year funds affiliated with private equity firm TPG Capital LLP (TPG) acquired a majority stake in family-run Poundworld.
Santander’s Leeds-based Large Corporate and Structured Finance teams worked together with the bank’s International Trade Finance team to create a bespoke financing structure which will support Poundworld’s significant growth objective of adding in excess of 60 stores per year to the existing portfolio of over 300 stores.
The value variety retailer, that also has a growing chain of over 50 multi-price stores trading under the ‘Bargain Buys’ fascia, will invest in a new IT system and 500,000 square foot warehouse facility near to its existing head office in Wakefield as a platform for its continued growth.
Santander had previously provided a £25 million finance package to Poundworld in March 2014 which combined a working capital revolving credit facility and a trade import loan facility used to fund the purchase of stock, principally from the Far East. Currently, approximately 25% of Poundworld’s suppliers are based overseas.
This new committed financing package sees the facilities significantly increased in size and secures a stable source of financing for the next five years. Additionally, Santander will provide facilities for foreign exchange, asset finance and operational currency overdrafts for day-to-day banking needs.
The business started on a Wakefield market stall in 1974 and opened its first Poundworld store in 2004. In the financial year to March 2015, the company doubled its earnings and saw turnover grow by over 22% to £422 million.
Chris Edwards, co-founder, Poundworld Retail Limited, said: “We have worked to build a recognised and respected brand and customer offering that provides savings to over two million Britons every week. Our ambition is to continue to introduce Poundworld’s value proposition to even more cities and towns across the UK.
“Santander’s help two years ago put the business on a firm footing and their support helped us to improve terms with our suppliers, landlords and credit insurers. The business was in a great position to attract the interest of TPG, resulting in its investment earlier this year and, combined with the new facilities from Santander, Poundworld is in a strong position to push forward with its next phase of growth.”
The Santander deal team was led by Paul Watkin, relationship director in Santander’s Large Corporate Team; Adrian Rowles, Director Structured Finance and Mark Lonsdale, International Director and they said: “The Poundworld story is one that we are very proud to be associated with. We see a great fit between the impressive performance already achieved by the management team now coupled with the significant backing of one of the world’s biggest private equity firms and are delighted to be supporting their strategy for the next period of growth.
“Santander is able to provide real value with our global reach and our International trade capabilities and expertise. Our International solution was already in place with Poundworld and has proven to successfully fit the working capital requirements of the business. We are pleased to have been able to commit and increase our facilities as Poundworld seeks to increase its overseas supply chain.”
Lawyers from the Leeds office of Bond Dickinson, led by Finance Partner, John Connor, provided legal advice to Santander.