- Toys “R” Us (ASX:TOY) and TRUK reach agreements for a UK exit
- UK departure relieves TOY from a $7 million UK working capital commitment, allowing for focus on ANZ growth
- TOY CEO Penny Cox highlights strategic transformation and strong TRUK partnership for a smooth transition
- The amended finance facility agreement includes reduced limit, adjusted interest rate, and revised security arrangements
- TOY last traded at .8 of a cent
Toys “R” Us (ASX:TOY) has finalised agreements with Tru Kids Inc (TRUK) to exit the UK market and relinquish its associated license.
The UK business division, estimated to need $7 million in initial working capital, was proving to be a distraction from TOY’s core activities in the ANZ region.
TOY CEO Penny Cox said an exit from the UK was in the best interests of the overall business.
“The TOYs UK division requires significant operational and financial resources to ensure its success in the market,” she said
“As I outlined last year, we are transforming the TOY business model to reduce its overheads and its cost base to the right-size to ensure it has a sustainable base
to build from.
“We’re fortunate to have a strong relationship with TRUK which has enabled us to implement a smooth exit of the UK market to allow TOYs to focus its efforts on the transformation and growth of our Australian activities through the creation of new channels to market.”
Under the executed agreements, TOY will transfer ownership of all UK business assets to TRUK, settling a $1.8 million outstanding loan balance in the process.
The company has also negotiated an amended facility agreement with its major finance partner.
TOY last traded at .8 of a cent.