Sale of THG boss’s business park falls through

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A sale of a business park owned by THG boss Matthew Moulding, which also houses the ecommerce group’s headquarters, has fallen through. 

The ecommerce group, which runs websites Lookfantastic and Myprotein, is a tenant at Icon Business Park in Manchester, ultimately owned by the THG co-founder.  

Moulding Capital Limited had been in talks with property company ICG Real Estate to sell the business park but no agreement was reached, according to two people familiar with the discussions.

For a transaction to proceed, a prospective buyer would need an approval from Warrington Borough Council to novate a £128mn loan. 

The Icon complex is used as a security for a £128mn portion of a £202mn loan the Labour-led authority gave to the group of companies controlled by Moulding in 2020, according to official documents. 

In July, the council cabinet initially approved a potential novation of the loan to ICG, which subsequently did not proceed with a deal.

The approval was criticised by Conservative councillor Mark Jervis, who said the cabinet had failed to properly scrutinise “flawed and erroneous arrangements” it had made when it looked at the novation loan.

“It is time for Labour to reduce its enormous debt mountain,” he added in a press release earlier this month. “The Labour cabinet is totally ill-equipped to make decisions on this debt.”

A Warrington Borough Council spokesperson said: “Cabinet approved a potential novation of an existing loan. However, for this to work it required the agreement of the council and two other parties. These agreements were not reached and therefore no novation was required.” 

“The change is simply a movement in the commercial view of the interested parties, and not a U-turn,” they added.

THG, Moulding Capital and ICG declined to comment. 

THG is unaffected as a tenant by the sale to ICG falling through. A sale to another party could still materialise.

Over the past decade, UK local councils have made large investments in a variety of commercial ventures, often taking on significant debts, in an effort to shore up budgets hit by cuts in central government funding.

The pressures on councils were highlighted last week when levelling-up secretary Michael Gove announced that he would appoint commissioners to take over the day-to-day running of Birmingham city council, after the local authority declared itself in effect bankrupt. 

Formerly known as The Hut Group, THG was hailed as a future star of the UK tech industry when it listed with a valuation of £5.4bn in 2020. 

However, a string of profit warnings and concerns over its corporate governance have blighted its life as a public company.

THG has beefed up its board and Moulding has relinquished the chairmanship and his “golden share” rights in an effort to ease investor concerns. Moulding has often criticised what he regards as unwarranted attacks on his business by the press and City analysts.