Peacocks survival hopes fade after RBS cuts lifeline

LONDON — Hopes that heavily indebted British clothing retailer Peacocks can avoid collapsing into administration faded yesterday after major lender Royal Bank of Scotland withdrew from talks about on a proposed debt-for-equity swap.

Peacocks

is

saddled

with £240 million ($366.84 million) of debt, and two sources with knowledge of the situation said an administration of the retailer, possibly within days, was the most likely scenario.

A spokeswoman for Peacocks, which trades from 611 Peacocks stores and 394 Bonmarche shops in the UK, employing about 10,000 people, said discussions among stakeholders regarding the restructuring of the debt were continuing.

She declined to comment on media reports the firm had lined up KPMG to carry out an administration, an insolvency process. KPMG comment.

State-controlled bank RBS withdrew from talks to turn some of the company's debts into equity holdings in the company after taking account of the British retail sector's poor news flow since Christmas, including last week's

declined

to profit warning from Tesco , the UK'S biggest stores group.

"Each company restructure is judged on its own merits, but clearly the difficult conditions that retailers face is an important factor. We have been and continue to be supportive of the company," RBS said in a statement. — Reuters