McColl’s collapse ‘increasingly likely’, 16,000 jobs at risk
The retailer noted that discussions regarding potential funding plans were still ongoing, however
McColl’s has warned that it is “increasingly likely” that the group will collapse into administration, in a move that could place 16,000 jobs at risk.
The group’s statement, which came in response to recent press speculation, said a third-party buyer would be sought if it was placed into administration, adding that “little or no value” would be attributed to its shares in the move. It noted that discussions regarding potential funding plans were still ongoing, however.
Sky News first reported on the potential administration last night (5 May), noting McColl’s could call in administrators as early as today.
It said the news could reportedly “spark renewed interest” in a partial takeover from both Morrison’s and EG Group, which is owned by TDR Capital and the Issa brothers.
While sources told Sky that “some form” of insolvency proceedings would now be likely, another source said a rescue deal was still possible, and ongoing talks about the group’s future could see the appointment of administrators delayed beyond the end of this week.
In its full statement, McColl’s said: “As previously disclosed on 25 April 2022, the group remains in discussions regarding potential financing solutions for the business to resolve short term funding issues and create a stable platform for the business going forward.
“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.”