McColl’s had been placed under administration of accounting and consulting firm PriceWaterhouseCoopers, after failing to get the short-term funding to stay afloat.
In an announcement this afternoon, the company said: “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, appointing 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. “
However, new reports from Mark Kleinman for Sky News have suggested that petrol giant EG Group has come into seal a final deal with the commany.
As understood by Sky News, the EG Group is putting the final touches on a takeover bid for McColl’s” through a pre-pack administration that would usurp a rival rescue proposal from Morrisons”.
McColl’s trades from 1200 convenience stores and newsagents across the UK and has a wholesale supply deal with Morrisons. The group employs 16,000 people.
The group has struggled since the start of the pandemic to move alongside changing consumer habits, and closed 179 stores in 2020 alone. Its strategy has been to shift from low margin newsagents towards larger, food-led convenience stores.
City A.M. reported yesterday that the firm had halted the rollout of its Morrisons Daily format stores, in a bid to preserve essential capital.
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.
The firm said its accounts would not be signed off by auditors in time to meet its deadline: sealing the deal for the company.
Commenting on the lack of deal, a Morrisons spokesperson 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.”
Commenting on the administration, Partner, Insolvency and Asset Recovery at law firm Stewarts Tim Symes, said: “Unhappy secured lenders ultimately rule the roost when it comes to their customers, able to appoint administrators almost instantly.”
Here the lenders appear to have decided that a sale of McColls’ business and assets out of administration will be a better outcome than allowing it to trade on and worsen their position. It is likely that conversations started with potential buyers before the administration, and so we can reasonably expect the winning bidder or bidders to emerge in the coming days or weeks.”