Morrisons makes last-minute bid to save McColl’s
CREDITORS REFUSE TO EXTEND DEADLINE FOR RETAILER TO FIND MORE CASH
CONVENIENCE shop chain McColl’s said discussions with its lenders collapsed yesterday as creditors refused to extend a deadline for the retailer to find more cash.
The company said in a statement to the London Stock Exchange: “In order to protect creditors, preserve the future of the business and to protect the interests of employees, the board was regrettably therefore left with no choice other than to place the company in administration, appointing PriceWaterhouseCoopers as administrators, in the expectation that they intend to implement a sale of the business to a thirdparty purchaser as soon as possible.”
McColl’s will apply to the court to appoint the administrators.
Shares on the stock market have been suspended.
The chain has 1,100 branches and 16,000 staff.
Morrisons had tabled a last-minute rescue deal to save the struggling convenience store business.
Morrisons has approached PwC, who are advising lenders to McColl’s. This would save the vast majority of jobs and stores.
A rescue deal would also take on the business as a going concern, absorb its debts of over £100 million and take responsibility for the company’s pension scheme.
Morrisons and McColl’s declined to comment yesterday.
The two businesses are major partners, with McColl’s operating hundreds of convenience shops under the Morrisons Daily brand.
However, McColl’s has struggled financially in recent years after witnessing soaring costs due to supply chain disruption, inflation and its large debt burden.
On Thursday evening, McColl’s said it was in talks over “potential financing solutions” to resolve its funding issues.
“However, whilst no decision has yet been made, McColl’s confirms that unless an alternative solution can be agreed in the short term, it is increasingly likely that the group would be placed into administration with the objective of achieving a sale of the group to a third-party purchaser and securing the interests of creditors and employees,” it added.
“Even if a successful outcome is achieved, it is likely to result in little or no value being attributed to the group’s ordinary shares.”
PHowever, whilst no decision has yet been made, McColl’s confirms that unless an alternative solution can be agreed in the short term, it is increasingly likely that the group would be placed into administration ... McColl’s