McColl’s has collapsed into administration in a move that places 16,000 jobs at risk, after lenders failed to extend its banking agreements.
In a newly released statement, the retailer said it was “regrettably left with no choice” other than to appoint PwC as administrators, with the expectation that they intend to sell the business to a third-party buyer “as soon as possible”.
Directors of the group and its subsidiaries have now filed documents at court today to appoint Mark James Tobias Banfield, Robert Nicholas Lewis and Rachael Maria Wilkinson of PwC as administrators, with the application expected to be approved by the court over the course of the day.
It comes as the group’s senior lenders declined to further extend the waiver of its banking covenants, which have now expired.
In a statement, McColl’s said: “Whilst the constructive discussions with the Company’s key wholesale supplier to find a solution with them to the Company’s funding issues and create a stable platform going forward had made significant progress, the lenders made clear that they were not satisfied that such discussions would reach an outcome acceptable to them.”
It has now requested that the listing of its ordinary shares be suspended with immediate effect.
McColl’s previously wanted of the potential collapse in response to recent press speculation, confirming that 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.
Sky News first reported on the potential administration last night (5 May), noting McColl’s could call in administrators as early as today.
According to the BBC, Morrison’s had indeed proposed a rescue deal on Thursday in a bid to save the chain, yet this was rejected by lenders.
As reported by the BBC, Morrison’s said: “We put forward a proposal that would have avoided today’s announcement that McColl’s is being put into administration, kept the vast majority of jobs and stores safe, as well as fully protecting pensioners and lenders.
“For thousands of hardworking people and pensioners, this is a very disappointing, damaging and unnecessary outcome.”