McColl’s appeals for rescue deal: Administration ‘increasingly likely’ unless solution can be found
Convenience store giant McColl’s has said it is “increasingly likely” it will be forced to call in administrators unless an immediate rescue deal can be cinched.
Responding to press speculation, the London-listed firm said that “unless an alternative solution can be agreed in the short term, it is increasingly likely that the group would be placed into administration.”
Administration would be with the objective of securing a sale to a third party and “and securing the interests of creditors and employees.”
The company said it was still 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.”
No decision had been made yet, the company said in an update on Thursday evening.
In a further blow to shareholders, the firm reiterated previous sentiments that even if a successful outcome was inked, it would be “likely to result in little or no value being attributed to the Group’s ordinary shares.”
The chain had been rumoured to be teetering on the edge of collapse, with thousands of jobs in the lurch.
According to Sky News, the newsagent operator, which employs some 16,000 people, could call in administrators as soon as Friday.
McColl’s has reportedly halted the rollout of its Morrisons Daily format stores, in a bid to preserve essential capital, according to a report by Retail Week.
A memo sent to staff this week outlined that the programme of converting stores was being put on hold, despite the Morrisons Daily format trading well.
Earlier this week, McColl’s said it was bracing for its shares to be suspended from the London Stock Exchange next month.
The firm said its accounts would not be signed off by auditors in time to meet its deadline.