Mothercare refinances £8m facility, further defers pension deficit contributions
By Josh White
Date: Friday 20 Feb 2026
(Sharecast News) - Mothercare said in an update on Friday that it has secured a refinancing of its existing £8m debt facility, extending maturities to the end of 2027 and increasing available funding, while also agreeing a further deferral of pension deficit contributions.
The AIM-traded company said it had entered into new financing arrangements with a consortium of investors via a special purpose vehicle to refinance and vary its facility with GB Europe Management Services, part of Gordon Brothers.
It said the revised facility totalled £8.46m on signing, with scope to increase to £10m subject to further investor demand, and runs until 31 December 2027.
The amended facility carried a 25% annual coupon, comprising a 10% cash-pay element and an additional 15% payment-in-kind non-cash coupon.
Although the facility remained in default and would be repayable on demand, Mothercare said the refinancing improved alignment between its secured creditors, including pension and debt holders, and shareholders.
Richard Griffiths, through associated undertakings, was contributing £5m to the special purpose vehicle and would be its majority shareholder.
As a substantial shareholder in Mothercare, the transaction constituted a related party transaction under the AIM rules.
The board said it considered, having consulted with Deutsche Numis as nominated adviser, that the terms were fair and reasonable for shareholders.
As part of the refinancing, Gordon Brothers was repaid £8.68m, including £0.52m of contractual fees and pre-payments in addition to principal.
It retained 43.4 million warrants over Mothercare ordinary shares exercisable at 8.5p per share.
Separately, the group's pension trustee agreed to extend the deferral of deficit contributions through to March 2027.
Contributions of £3m due in each of the years to March 2026 and March 2027, totalling £6m, would be deferred and paid under a new schedule to be agreed by 31 March 2027, with contributions resuming from 19 April 2027 at a level deemed affordable by the trustee.
"With the support that our stakeholders have shown today, Mothercare can accelerate into 2026," said chairman Clive Whiley.
"Today's debt refinancing removes some material uncertainty for the company and our other stakeholders and will give us the flexibility and room to manoeuvre to get Mothercare back to where we should be.
"Our recent agreements with Reliance in South Asia and Ebebek in Turkey show the intrinsic value of and opportunity for our brand and operations in international markets."
At 1144 GMT, shares in Mothercare were up 12.74% at 2.08p.
Reporting by Josh White for Sharecast.com.
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