Barclay family launches forced sale of Very Group

Brothers Aidan (pictured) and Howard have agreed to either sell the entire company or a stake as part of a rescue refinancing deal - Oli Scarff/Getty Images

The Barclay family have been forced to put their online retailer Very Group up for sale in a bid to tackle its mounting debts, including hundreds of millions owed to Abu Dhabi’s ruling family.

Brothers Aidan and Howard, who oversee the Barclays’ dwindling business empire, have had to agree to either sell the entire company or a stake in the business as part of a complex rescue refinancing deal hammered out with its biggest creditors earlier this month.

Lenders, led by American private credit giant Carlyle, demanded the terms in return for pushing out the repayment deadline on a £280m loan owed by Very’s immediate parent company.

The debt was due to expire in July but Carlyle has extended the maturity date to November 2025, handing the Barclays a late reprieve.

However, as part of the new arrangement, the family have agreed to “either refinance or repay all applicable group facilities via a sale or partial sale” of Very before two separate large tranches of debt mature in 2026, accounts filed at Companies House reveal. These include a £150m revolving credit facility – a form of corporate overdraft – and £575m of bonds.

The disclosure of a sale casts the role of former Cabinet minister Nadhim Zahawi in a new light, at the centre of the process. He was appointed as Very chairman in May, succeeding Aidan Barclay in a board shake-up that also parachuted in representatives of Carlyle and Abu Dhabi.

Former Cabinet minister Nadhim Zahawi took over as Very chairman in May - Jamie Lorriman

As trading at Very has worsened and its debts have ballooned, the company has become increasingly reliant on Carlyle. The firm came to the rescue in February, providing £85m of a fresh £125m funding package as its financial fortunes continued to deteriorate. The company slumped £2m into the red in the second quarter, after profits tumbled from £64m to £4.6m in 2023.

Obtaining a full picture of Very’s finances is difficult because it sits within a complex web of interrelated companies. The whole group has borrowings totalling more than £3bn but this is made up of multiple individual loans that sit in different parts of the structure.

Ownership is also opaque because some of the companies sit offshore in jurisdictions requiring little disclosure.

Group debt includes a £600m loan that sits higher up the corporate chain and is owed to International Media Investments (IMI), the Abu Dhabi investment vehicle owned by Sheikh Mansour bin Zayed al-Nahyan, UAE vice president and owner of Manchester City football club.

Group debt includes a £600m loan owed to the Abu Dhabi investment vehicle backed by Sheikh Mansour - UAE PRESIDENTIAL COURT/via REUTERS

IMI’s unlikely status as a major creditor to a high street chain that sells flat screen TVs on hire purchase to low-income households is the result of its unsuccessful attempt to buy the company behind The Telegraph newspaper and Spectator magazines.

Sheikh Mansour last year helped repay an overdue Barclay family debt owed to Lloyds Banking Group. Two new loans, one from Redbird IMI and one directly from IMI, were secured against The Telegraph and Very respectively.

RedBird IMI, which is 75pc funded by the Sheikh and 25pc by the US private equity firm RedBird Capital, was forced to abandon its attempt to convert its loan into ownership of The Telegraph after new laws banning state ownership of UK newspapers were hurriedly introduced last month.

Despite this disappointment, IMI provided the remaining £40m of February’s cash injection at Very.

A sale of Very would leave the Barclays with little of what was once a sprawling business empire. Redbird IMI is seeking buyers for The Telegraph and The Spectator following the Government’s intervention, and the parcels delivery operator Yodel slipped from their grasp via a pre-pack deal earlier this year.

The family has previously tried to sell Very on at least two separate occasions but both times prospective investors failed to meet their price expectations.

Trading at Very is supported by a separate £1.6bn “securitisation facility”, which enables the retailer to sell the vast majority of its goods via consumer credit. More than 90pc of transactions are funded this way.

It sells everything from computer tablets and garden furniture to lego and perfume. The facility is provided by a syndicate of banks, including HSBC and NatWest.

The Barclay family declined to comment.

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