McColl’s to enter administration
McColl’s Retail Group has said it has been left with other choice than to place the company into administration as it looks to “protect creditors, preserve the future of the business and to protect the interests of employees”.
The convenience retailer announced last month that it was talking to its lenders regarding potential financing solutions to resolve short term funding issues and to create a stable platform for the business. It also revealed that its Easter trading performance was weaker than expected.
In this latest statement, McColl’s said its senior lenders had declined to further extend the waiver of the company’s banking covenants, which has now expired.
It had been reported last week that Morrisons had put forward a rescue plan. McColl’s is already working with the supermarket through the operation of hundreds of smaller shops under the Morrisons Daily brand.
However, 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.”
McColl’s is appointing PwC as administrators in the expectation that it intends to implement a sale of the business to a third-party purchaser. Asda owner EG Group has also entered the fray.
The administrators are now understood to be considering improvements to bids from both Morrisons and EG Group.
