Online retailer THG has announced a debt refinancing package and equity fundraise 鈥� with CEO and founder Matt Moulding committing up to 拢60m of his own money.
The planned refinancing package will reduce the overall debt and extend the term to 2029 as the Manchester-headquartered firm looks to expand its consumer markets.
The move follows the demerger of from the profitable THG Beauty and THG Nutrition and the 聽company鈥檚 return to the FTSE 250 Index.
Moulding has agreed to contribute up to 拢60m to the equity fundraise, which follows the 拢50m he’s already invested in THG shares since its IPO.
THG’s existing 拢760m banking facilities weren鈥檛 due to expire until the end of 2026 but the move provides additional聽 certainty.
One analyst claimed: 鈥淚t鈥檚 one of the biggest founder subscriptions on the stock market in UK history.鈥�
Writing on LinkedIn, Moulding said running a business was as stressful as having children and compared his actions to taking care of his ‘corporate offspring’.
He said: 鈥淣obody warns you about the crushing burden of responsibility when setting up a business. It鈥檚 a lot like parenting. People say it鈥檚 magical, and from the outside it looks simple enough.
鈥淏ut, in a blink, four kids had arrived before I realised I’d signed up to a lifetime of stress – each additional child exponentially increasing the worry.
鈥淪tarting a business follows the same path. Before you know it, you’re in above your head with growing numbers of staff and stakeholders.
鈥淟ike parenting, founders/CEO feel the burden of nurturing their corporate offspring, bringing solutions to challenges.
鈥淲e all know the world is a volatile place right now 鈥� Trump has brought shock and awe to world order and financial markets alike.
Matt Moulding and friends on a weekend skiing trip (Copyright Matt Moulding)
鈥淭he resulting instability means very few deals are getting done in corporate land. People are naturally sitting on their hands to see how things play out.
鈥淏ut not even Trump knows if stability will return this time next year. Every action has a reaction, and Trump likes action. And so THG has decided to crack on anyway.
鈥淭his afternoon, we announced plans to refinance the group’s existing 拢760m banking facilities, which don’t expire until the end of 2026.
鈥淥ver the past few weeks we鈥檝e worked with the debt markets to understand what a deal would need to look like to refinance our facilities early, on similar terms to our existing deal.
鈥淕iven THG Ingenuity is no longer part of THG, we’re planning a new 拢550m set of facilities, reflecting THG no longer funding Ingenuity’s capex investments.
鈥淎chieving a similar interest rate as the pre-Covid 鈥榝ree money era鈥� isn鈥檛 quite as simple.
鈥淗owever, the feedback from debt markets has been that this should be achieved if THG raises 拢60m of equity.
鈥淎nd so, like any parent, I鈥檓 once again stepping up for THG. This time investing a further 拢60m into THG, underpinning the planned refinancing.
鈥淛oining the LSE four-and-a-half ago hasn鈥檛 proved too profitable for me or my family. I will soon have bought 拢110m of THG shares in less than five years.鈥�
No salary for 5 years
The 53-year-old entrepreneur spent the weekend skiing with friends and revealed he鈥檚 waived around 拢15m in salary and expenses payments since the 2020 IPO 鈥� but has drunk as much coffee as he wants!
鈥淒espite the CEO role normally attracting remuneration of c拢3m a year, since IPO I’ve waived all remuneration and expenses, effectively paying to go to work each day,鈥� he wrote. 鈥淚 do get free coffee though.
鈥�(My wife) Jodie and the kids are vocal in saying I鈥檓 an idiot for not taking the 拢15m in remuneration these past five years 鈥� they鈥檙e probably right. But everyone has their own take on parenting.
鈥淚n respect of THG, this is mine. Each decision, from investing 拢110m in THG shares, buying control of Ingenuity at the end of 2024, and waiving 拢15m remuneration since IPO, has been my best take on parenting my corporate offspring.
鈥淚鈥檓 not aware of anyone ever listing on the LSE and taking a similar path. Smart folk. I mean, why would they?聽Hopefully time will prove it’s been a path worth taking.鈥�
Under current authorisations, THG can issue up to c.91.86m shares for cash (equivalent to c拢31.2m at current market price).
Moulding has agreed to subscribe for up to 拢31.2m in the equity placing and other stakeholders may also get involved.
His investments will be made personally or via FIC Shareco Limited.
The proposed refinancing聽comprises:
- Partial amend & extend of the existing EUR term loan B to extend the maturity of 鈧�475m to December 2029;
- Repayment of the 拢109m existing GBP term loan A and the remaining 鈧�125m of the TLB through a combination of cash on balance sheet and a new equity contribution of at least 拢60m and up to a maximum of 拢91.2m; and
- Extending the maturity of the existing 拢150m revolving credit facility to May 2029.
As a result of the proposed refinancing, net total leverage (excl. leases) would decrease from 3.2x to 2.6x based on continuing adjusted EBITDA聽(excluding Ingenuity) of 拢92m in 2024, on a fundamentally more cash generative business.