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McColl’s confirms rescue talks as it scrambles to save 1,100 stores from collapse


McColl’s has confirmed reports over the weekend which stated the convenience store chain was looking for fresh funding to keep the business and its 1,100 shops afloat

McColl's has confirmed it is holding talks with lenders
McColl’s has confirmed it is holding talks with lenders

Convenience store chain McColl’s has confirmed it is in talks with lenders to secure a “long-term agreement” to prevent it from collapse.

McColl’s has addressed reports over the weekend which claimed it was looking for fresh funding to keep the business afloat.

Some 16,000 jobs could be put at risk if McColl’s was to collapse.

The newsagent giant operates 1,100 convenience stores across Britain, with about 200 of them now trading under the Morrisons Daily format.

In a statement to the London Stock Exchange, a spokesperson for McColl’s said “it remains in ongoing discussions with its lending banks… towards a longer-term agreement”.

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The message continued: “The Group has received the necessary agreement to roll forward its financial covenant test periodically, and continues to receive credit support from its key commercial partner to enable these discussions.

“The Group continues to believe that a financing solution will be found that involves its existing partners and stakeholders. A further update will be made as and when these discussions conclude.”

The statement comes after McColl’s warned its 2022 profit would be “slightly behind” current expectations.

The firm expects profits of between £20million and £22million, down from a previous forecast of £27million. It raised £30million from shareholders in a cash call just six months ago.

The business made sales of £1.1billion last year and has £97million of debt.

Do you shop at McColl’s and is it your store of choice? Let us know in the comments below.

McColl’s has also confirmed that it had received a takeover approach for the whole business which was later withdrawn. The convenience store chain didn’t go into detail about who had shown interest.

Petrol station giant EG Group, owned by Asda owners Mohsin and Zuber Issa, and the private equity firm TDR Capital are reported to have previously held discussions over a possible takeover.

However, Sky News reported over the weekend that the pair decided against making an offer on McColl’s last week.

McColl’s said in its London Stock Exchange update: “The Group confirms that it recently received an approach for the whole business, which has subsequently been withdrawn.

“There are no further discussions with that party or any other party in relation to an offer for the whole business. In addition, the Group has also received indications of interest for parts of the business.

“The Board will consider all options with the aim of maximising value for all stakeholders.”

McColl’s Retail Group PLC shares were down 11% today as news of a potential collapse continued to dominate headlines.

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