The Body Shop was purchased by a private equity firm for just £3.5m before the collapse of .
Aurelius is believed to have only paid a small amount of money to Natura, the former owners of The Body Shop, despite having agreed to a £207m purchase in November.
The shortfall at Natura is primarily due to a £90m payment based on performance that Aurelius had been expected to make over five years. Aurelius’ decision to put The Body Shop in administration last February means that Natura is unlikely to receive the £90m payment.
The question of how much Natura will get from Aurelius after the £3.5m that it paid up front has been raised.
The prospect of Natura suffering steep losses will further exacerbate tensions between the parties. Aurelius had previously been criticized by the seller for not paying millions of pounds in wages to former employees.
Natura stated last month that they were “surprised” and “concerned” when Aurelius retracted its promise to pay around 30 former employees.
The £207m was the enterprise value, which included debts that Aurelius had taken on through the acquisition. The private equity buyer did not have to pay Natura the full amount.
The revelation that only £3.5m was exchanged will likely raise questions about the circumstances of the transaction.
The Body Shop went into administration three months after the ownership change. After administrators at FRP shut down large sections of stores , it led to the loss of hundreds of jobs. The redundancy costs are covered by the taxpayers.
MPs are concerned about the impact of the Body Shop on public finances. The Body Shop has been a fixture in Britain’s high street since 1976, when it was founded by Anita Roddick.
The Body Shop was purchased by Brazilian cosmetics giant Natura for £880m (£880m) in 2017.
The Body Shop owes Natura PS12.8m through its subsidiary. Aurelius had previously stated that The Body Shop’s finances were in a worse condition than expected following the takeover.
Aurelius Natura have declined to comment.
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