US Hedge Funds Move Closer to Scrambling Brighthouse

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Brighthouse, the largest rent-to-own retailer of Britain, could soon be leaving its private equity owner as a consortium of bondholders gets closer to postponing a deal.

The chain, which rents out household items including vacuum cleaners and fridges through its 280 shops, is under escalating pressure to refinance £220m of bonds that are due on 2018.

It anticipated starting a formal sales process this month. However, a consortium of bondholders is planning to recommend a debt-for-equity swap in the coming weeks. The said plan could squeeze out Vision Capital, its private equity owner, which acquired the group 10 years ago as a part of a wider deal that was worth around £250m.

Recent changes to rules to the hire-purchase sector have had a significant impact on Brighthouse, essentially because it has had to reject possible customers for having weak credit histories.

Earnings crashed by 79pc to £11.7m in the year to March, although the chief executive, Hamish Paton, said last month that the group was “making progress in returning the business to growth”.

Brighthouse did not reply to requests for comment at the time of writing.