McColl's newsagents has gone bust leaving 16,000 jobs at risk
The convenience chain said on Thursday it was in talks over “potential financing solutions” to resolve its funding issues
McColl’s has confirmed it has gone bust and will appoint administrators, putting 1,100 shops and 16,000 jobs at risk.
The convenience chain had struggled badly during the pandemic due to supply chain issues, inflation and a heavy debt burden.
McColl’s said discussions with its lenders collapsed on Friday as creditors refused to extend a deadline for the retailer to find more cash.
Supermarket giant Morrisons, which is a major wholesale partner, also tabled a last-ditch effort to buy the business.
But McColl's said in a statement to the London Stock Exchange: “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 as administrators, in the expectation that they intend to implement a sale of the business to a third-party purchaser as soon as possible.”
McColl’s will apply to the court later today to appoint the administrators.
On Thursday evening, McColl’s said it was in talks over “potential financing solutions” to resolve its funding issues.
It said: “However, whilst no decision has yet been made, McColl’s confirms that unless an alternative solution can be agreed in the short term, it is increasingly likely that the group would be placed into administration with the objective of achieving a sale of the group to a third-party purchaser and securing the interests of creditors and employees.
“Even if a successful outcome is achieved, it is likely to result in little or no value being attributed to the group’s ordinary shares.”
Shares in McColl’s were suspended earlier this week after the company delayed the publication of its latest financial results due to its financing talks.