Moulding gives up Hut Group’s pledge on £100m loan deal in bid to restore confidence after share price collapse
The Hut Group founder Matt Moulding has cancelled a deal that saw him pledge company shares as collateral against a £100million personal loan.
As he strives to restore confidence following a collapse in the share price, the 49-year-old unwound the arrangement agreed before THG floated.
The deal with Barclays saw Moulding put up 28m THG shares as collateral for the loan while his wife Jodie pledged 9.8m, and his holding company FIC Shareco Ltd 144m.
The Hut Group founder Matt Moulding (pictured) has cancelled a deal that saw him pledge company shares as collateral against a £100m personal loan
An insider said loans of this type, secured against shareholdings, were ‘typical’ for founders who wanted to release wealth almost entirely tied up in their company.
But the pledge of shares – which could have seen Barclays ending up with a near-19pc stake in THG if there were a default – was highlighted as a ‘significant red flag’ in a critical research note by The Analyst this month.
That note accelerated a sell-off in the online retailer’s shares that was already underway. The crisis mounted after a disastrous presentation by Moulding to investors last week that saw the shares crash 35 per cent in two hours.
Blaming short-sellers, Moulding told the Mail at the time: ‘It has not been a great day.’
He has since moved to rid the company – whose brands include Lookfantastic and Espa – of governance quirks to halt the falling share price.
He has surrendered his ‘golden share’, which gave him the right to veto takeovers for three years, enabling the stock to enter the FTSE 100.
The firm is also on the hunt for a new non-executive director, and is reportedly in advanced talks with Andreas Hansson, a senior SoftBank executive.
The share price has stabilised – and rose 1.4 per cent or 4.6p to 330p yesterday – despite the firm not yet addressing concerns over Ingenuity.
Moulding remains executive chairman, meaning there is no independent chairman. He is also THG’s landlord, pocketing £19.4million from the company in rent each year.
He has claimed an all-share bonus, worth £830million at the time, for pushing THG’s share market value temporarily above £7.25billion. A trading update for three months to September is due on Tuesday.
Analysts at Jefferies said: ‘Ultimately it is a confirmation of ongoing strong trading progress and upbeat revenue expansion at Ingenuity which will be critical to a rebound in THG’s valuation.’