Nadhim Zahawi Appointed Chairman of Indebted Retailer Very Group

Jennifer Creery, Bloomberg News

Nadhim Zahawi , Photographer: Leon Neal/Getty Images

(Bloomberg) -- Nadhim Zahawi, former chancellor of the Exchequer, has been named chairman of Very Group, just days after announcing he will stand down as a UK Member of Parliament at the next general election.

The Conservative politician will replace interim chair Aidan Barclay — the nephew of tycoon Frederick Barclay — the British online retailer said Monday.

Zahawi joins Very Group after a period of turmoil for the retailer which is grappling with a large debt burden. The Liverpool-based group, which owns brands Very and Littlewoods, is among the largest of the Barclay family’s holdings.

The Barclays lost control of the influential Telegraph newspaper and Spectator magazine last year after Lloyds Banking Group Plc seized assets owned by the family, who had £1.2 billion ($1.5 billion) in debt.

Joining Very Group is the latest move for the controversial politician Zahawi, who was fired as Conservative Party chairman after he said he made a mistake in failing to disclose a tax investigation. He later paid almost £5 million to the UK tax authority to settle his affairs.

Zahawi is among a string of former Conservative politicians to announce plans to step down at the coming election, including former Prime Minister Theresa May, former chancellor Kwasi Kwarteng and former deputy prime minister Dominic Raab.

Earlier this year, Very Group secured a £125 million funding package through a strategic partnership with Abu Dhabi investment fund International Media Investments and private equity firm Carlyle Group.

The package was part of a wider attempt to buy the Telegraph, in which IMI teamed up with US investment group Redbird Capital Partners LLP. Zahawi advised on the deal, but it collapsed earlier this year as senior politicians argued that it could lead to a foreign state holding influence over a major British newspaper.

Zahawi will start as Very Group chairman on June 1. The company said he will work with shareholders on the “optimal capital structure” for growth, which may involve fresh equity investment in the short to medium term.

(Updates with Zahawi’s starting date and context from seventh paragraph.)