Update on financing progress

• On 23^rd October 2019 Shop Direct announced its intention to raise up to £150 million of additional funding following an unexpected late surge in PPI claims volumes ahead of the 29 August 2019 deadline
• £150 million committed funding has now been sourced by parent company, Shop Direct Holdings Limited (“SDHL”) and is available to be contributed to Shop Direct Limited (“Shop Direct” and together with its subsidiaries, the “Group”)
• £75 million to be invested by way of equity injection before the end of November
• The Group continues to evaluate alternatives for the remaining £75 million, including both equity and debt financing options, recognising that this capital is not immediately required
• The Group is able to further benefit from an offer of an underwritten commitment for up to £100 million new notes issued under our securitisation programme, providing an alternative funding option

Shop Direct is pleased to provide an update on our financing process.

Having announced our intention to raise additional funding of up to £150 million to address our increased PPI claims liability, Shop Direct’s parent shareholder, SDHL, has now secured committed funding for up to the full amount sought, which is now available for onward investment into Shop Direct.

Whilst the Group has no immediate need for funding, £75 million will shortly be invested in the business by way of equity injection from SDHL into Shop Direct, demonstrating the continuing support and commitment of our parent company.  This funding is due to occur before the end of November.  The remaining £75 million is fully committed to SDHL and will be available to the Group for subsequent drawing in accordance with its liquidity requirements.

Whilst SDHL has now secured the full amount of committed funding required by Shop Direct, we are continuing to work with our financial advisers to evaluate alternative financing options for the £75 million that will initially remain undrawn.

The Group has no near term liquidity requirements and is keen to ensure that it has fully explored its financing alternatives to ensure that the best terms are achieved.

The committed funding available to our parent shareholder enables SDHL and Shop Direct to address fully the Group’s funding needs from the increased final PPI provision; together with the alternative funding options being evaluated, this once again demonstrates investor support for our proven operating model.

In addition to the funding available to our parent shareholder, we have also received an offer on agreed terms that would enable up to £100 million of new notes to be issued under our existing receivables securitisation programme.  This new “C-2” Notes issuance would be fully underwritten and initially undrawn, providing an alternative financing option for the Group whilst it concludes its overall funding plan.

It is the Group’s intention to reach a conclusion on its financing structure as quickly as possible and we will provide a further update as soon as this is decided.

ENDS

CONTACT INFORMATION

Brunswick Group      

Eilis Murphy                 020 7404 5959

Sam Chienne               020 7404 5959

Morgan Stanley        

Nick Bishop                  020 7425 5745

About Shop Direct

As the UK’s largest integrated pureplay digital retailer and financial services provider, Shop Direct has annual sales of £2bn.

Shop Direct’s retail brands are Very.co.uk, Littlewoods.com and Littlewoodsireland.ie. The company receives an average of 1.5m website visits every day, with 79% of online sales completed on mobile devices.

Shop Direct exists to make good things easily accessible to more people. With its multi-category range of famous brands, market-leading technology and data capabilities and unique financial services products offering flexible ways to pay, the group is well placed to deliver on that promise.

The company sells more than 1,900 famous brands, including big name labels and its own brands. Shop Direct has 4.05m customers and delivers 49m products every year. Its free click-and-collect service, CollectPlus, delivers to 7,000 stores across the country, increasing ease and convenience for customers.

For more information on Shop Direct, visit www.shopdirect.com or follow the company on Twitter at @ShopDirect.