McColl’s placed into administration
The retail group has appointed PriceWaterhouseCoopers LLP as administrators, “in the expectation that they intend to implement a sale of the business to a third-party purchaser as soon as possible”.
In an update this afternoon, McColl’s said while discussions to find a solution for its funding issues had made significant progress, “the lenders made clear that they were not satisfied that such discussions would reach an outcome acceptable to them”.
In a statement, the group stated: “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.”
Further, it has also requested that the listing of its ordinary shares be suspended with immediate effect.
The move comes just days after McColl’s admitted that without being able to secure more funding it would likely collapse.
It has more than 1,000 shops and newsagents and 16,000 employees. It is also the largest operator of Post Offices in the UK with more than 500 branches in stores.
Supermarket chain Morrisons reportedly proposed an improved offer for the chain on Thursday evening, according to Sky News. This would include taking on McColl’s pension commitments and its £170m debt.
Morrisons already has a partnership with McColl’s through its Morrisons Daily convenience shops. In November, it said the number of Morrisons Daily conversions would increase from 350 to 450 within a year.
Last year it raised £30m from shareholders to fund an expansion of the Morrisons Daily convenience stores, but also warned of a drop in footfall because of the coronavirus pandemic.
The two firms have been in talks to rescue the convenience chain and to save as many jobs as possible but confirmation of a deal had not yet been confirmed.
In an earlier statement, McColl’s said: “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.
“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.”
Morrisons is itself in the middle of a proposed merger with American private equity firm CD&R, which is currently awaiting approval from the competitions regulator.
This deal, worth £7bn, would see CD&R and Morrisons join forces, along with the supermarket’s 339 petrol stations.
It had previously caused concern from the Competitions and Markets Authority (CMA) which suggested it “could lead to higher fuel prices for drivers in some parts of the country”.
But CD&R has proposed to sell 87 of its petrol stations which the CMA said would restore the loss of competition in the areas affected and it is “minded to accept the proposals”.