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British Land drops bid to derail Monsoon rent cuts

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A branch of Accessorize Monsoon Children on Oxford Street, central London

British Land, one of the UK's largest street owners, has abandoned a legal challenge that threatened to derail a bailout restructuring of Monsoon Accessorize, the fashion chain.

Sky News has learned that real estate company FTSE-100, which owns places like Meadowhall Mall in Sheffield, has agreed to withdraw an offer to block the Monsoon (CVA) voluntary agreement.

The CVA, which was approved by lenders in July, will now be implemented, with rents cut by 25% to 65% in just over half of Monsoon Accessorize's 258 stores across the UK.

The terms of any deal between British Land and Monsoon were unclear on Thursday, with a retailer spokesman only confirming that the challenge had been "withdrawn by agreement."

British Land has only a few Monsoon Accessorize stores, but was annoyed by several elements of CVA's proposals, including the structure of the new financing provided by retailer owner Peter Simon.

The real estate giant voted against the CVA, but the proposals drew support from more than 90% of lenders.

British Land was said to consider that Simon did not hear the owners' concerns about the terms of other CVAs, which have been deployed over the past two years to companies such as Carpetright, Mothercare, New Look and Toys R Us UK.

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The terms of any agreement between British Land and Monsoon were unclear on Thursday.

A separate dispute between British Land and Simon's privately owned company Adena concerning Monsoon's former headquarters was said to be unrelated to the CVA challenge.

It is unclear whether this separate dispute has been resolved.

The dispute has made Monsoon Accessorize one of several major street names to counter opposition to a rescue plan.

Last week Debenhams won a legal ruling that allowed him to implement his own bailout plan following a Mike Ashley Sports Direct International-funded CVA challenge.

Topshop tycoon Sir Philip Green agreed to pay millions of pounds last month to resolve a complaint made by two US funds about the restructuring of his empire in Arcadia.

The entrepreneur only got Arcadia CVA approval after tampering with the terms in favor of owners such as Intu Properties, owner of the Lakeside mall in Essex.

A series of street insolvencies highlighted tensions between landlords and retailers as changing consumer habits intensify the pressure on landlords and tenants.

Monsoon's restructuring does not include any immediate store closure plans, while other retailers, including the Office shoe chain, have decided not to use CVAs in an effort to reach a consensual agreement with lenders.

Paul Allen, chief executive of Monsoon Accessorize, recently said he would step down after six years.

British Land declined to comment.

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