Homebase collapsed into administration in November, revealing it owed more than £650 million to unsecured creditors including AO World, Halfords, and The Hut, according to documents newly filed at Companies House.
Teneo, the appointed administrator, disclosed that unsecured non-preferential creditor claims totalled £657 million—a sum that includes around £100 million owed to trade creditors. Unsecured creditors rank behind secured creditors in any repayment process, making it unlikely they will recoup outstanding funds.
The breakdown of debts reveals that Homebase’s directors listed a £2.9 million liability to Close Brothers for till systems, £1.7 million to XPO for logistics services, and approximately £750,000 to AO World for appliances linked to Homebase’s kitchen business.
Among the largest unsecured debts is an intra-group claim of about £524 million owed to Ark Finco. Owned by Paul McGowan, executive chairman and founding partner of Hilco, Ark Finco had already provided an £80 million working capital facility, fully drawn at the time of administration. Teneo is seeking legal advice on the security status of the intra-group debt, which may yet alter the outcome for creditors.
Jonathan De Mello, an independent retail analyst, said: “The huge level of debt Homebase accrued over the years is an all too familiar story, with various creditors left out of pocket—and no hope of recovering monies owed—as a result of the failure of the business.”
Homebase’s mounting financial troubles came to a head after Wells Fargo—concerned about the company’s challenging trading prospects—declined to extend a £95 million lending facility due to expire in December. With no further financing options, directors opted for an administration process.
Immediately following Teneo’s appointment, 70 Homebase stores, along with the brand and associated intellectual property, were sold as part of a pre-pack deal reportedly worth about £30 million. The purchaser was Chris Dawson, owner of The Range and Wilko, while ownership under Hilco Capital had lasted since 2018 when Hilco bought Homebase from Wesfarmers for £1.
Homebase’s trading fortunes saw a brief upswing during the pandemic in 2020 and 2021, amid strong consumer demand for DIY and garden supplies. However, the following years proved more difficult, with the company eventually reporting losses of £59.3 million.
Auditors raised “material uncertainty” about Homebase’s ability to continue trading once its key Wells Fargo loan facility neared its end. Attempts to refinance or find a buyer were ultimately unsuccessful, culminating in the November administration.
Although Teneo continues to assess claims, the significant level of secured and unsecured liabilities—along with “no achievable refinancing or legally binding compromise of debts”—means many creditors face steep losses, with the final amounts still subject to ongoing review.
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Homebase owes £650m unsecured debt as administration details emerge