Farfetch applies to appoint UK administrator as investors fight Coupang takeover
The directors of online luxury goods retailer Farfetch have applied to the English High Court with an application to appoint an administrator.
The company has instructed US law firm Latham & Watkins to handle the application, according to an update in the High Court public claims system.
The development comes after Farfetch was bought by the South Korean e-commerce group Coupang in December as part of a last-minute rescue deal for the struggling firm.
As part of the deal, it was agreed that the UK-based, but US-listed, firm will receive $500m (£395.6m) in capital funding to continue its operations while its shares would be delisted. The funds were provided by Athena Topco LP, an entity owned by Coupang.
The companies also entered into a transaction support agreement, pursuant to which the sale of the Farfetch business to Athena Topco LP was expected via a UK pre-pack administration process.
The administrator request filed in the High Court is understood to be a part of that process.
Farfetch and Latham & Watkins were contacted for comment on the new High Court application.
Farfetch has more than four million active users and connects wealthy customers to luxury boutiques around the world. While demand for the retailer’s products boomed during the pandemic, a slowdown in luxury spending has left the company struggling.
News of the court application comes after it was announced last week that Farfetch investors have formed a group to challenge the Coupang deal.
The group, known as the 2027 Ad Hoc Group, is made up of institutional investors that hold over 50 per cent of Farfetch’s 3.75 per cent convertible senior notes due 2027.
The 2027 Ad Hoc Group appointed law firm Pallas Partners as legal counsel and Ducera Partners, an investment bank, as financial advisers, “to urgently evaluate options to protect its interests in the face of the value destruction that it believes will be effected should the Coupang sale go ahead”.