According to at least three insiders, El Corte Inglés has hired business bank Morgan Stanley to reorganise their debt of about five billion euro, says Bloomberg.
The biggest chain of department stores in Europa is said to be in the process of renegotiating the terms for loans with different parties. El Corte Inglés is facing a difficult time: unemployment in Spain has risen to 27.2%, the highest number in 37 years. That has its effect on the chain: economic growth is shrinking and retail sales have dropped by 11% in March, when compared to the previous year.
At the moment sources at El Corte Inglés and Morgan Stanley do not want to confirm the reports officially, but the company did release a statement saying “the re-ordering of its debt was part of ordinary activity in its financial area to give the company greater flexibility.”
Daniel Lacalle, portfolio manager at Ecofin from London, calls the deal “sensible”. “The company may try to have its debt guaranteed by assets such as its department stores, which are located in prime locations and will be very attractive for investors - even if the Spanish market continues to be tough”, he says to Bloomberg.
El Corte Inglés is the biggest employer of Spain, with more than a 100,000 employees. The chain has 81 department stores in Spain and two more in Portugal and it has 1.5 million visitors each day. It is also the third largest chain in the world in terms of sales, after the American chains Sears and Macy’s.