New Look’s management team is set to make millions of pounds from the retailer’s payment in kind (PIK) notes.

The retailer issued the £359m PIK in 2006 to pay a special dividend to private equity owners Permira, Apax and its other shareholders.

According to The Telegraph, private equity owner Apax and New Look chief executive Carl McPhail bought millions of pounds of PIK debt at the height of the credit crunch for as little as 25p in the pound, and the team is set to benefit from a windfall when the notes are bought out at full value when the business is sold or the instrument matures.

New Look will use £600m of the £650m it hopes to raise from institutional investors by floating to pay off the PIK note holders.

Micky Jagtiani, the owner of Dubai-based investment firm Landmark Group, is also set to be one of the largest beneficiaries on New Look’s PIK payout.

Permira, which would sell down its 27.7% stake after an IPO, is not thought to have invested in New Look’s debt.