McColl’s confirmed reports over the weekend that the convenience store chain was looking for fresh capital to stay in business and that its 1,100 stores survived.
Image: McColl’s retail team)
Convenience store chain McColl’s confirmed it was in talks with lenders to secure a “long-term deal” to prevent it from collapsing.
McColl has reports resolved by the end of the week which states that they are looking for new capital to keep the business afloat.
About 16,000 jobs could be at risk if McColl’s Collapsed.
The newspaper giant operates 1,100 convenience stores across the UK, with around 200 of them currently doing business under the Morrisons Daily format.
In a statement to the London Stock Exchange, a spokesman for McColl said “it is still in discussions with its lenders … towards a longer-term arrangement”.
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The message continued: “The Group has obtained the necessary arrangements to conduct periodic audits of the financial covenant and continues to receive credit support from its significant trading partner to conduct the meetings. this discussion.
“The Group continues to believe that a financial solution will be found involving existing partners and stakeholders. A further update will be made when and when these discussions are over. “
The statement came after McColl’s warned its 2022 profit would be “slightly below” current expectations.
The company expected a profit of between £20m and £22m, down from its previous forecast of £27m. It raised £30m from shareholders in a cash call just six months ago.
Last year, the company had sales of £1.1 billion and owed £97 million.
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McColl’s also confirmed that it received a method of taking over the entire business that was subsequently withdrawn. The convenience store chain did not go into detail about who had expressed interest.
Petroleum giant EG Group, owned by owner Asda Mohsin and Zuber Issaand private equity firm TDR Capital are said to have held earlier discussions about a possible takeover.
However, Sky News reported over the weekend that the pair decided not to make McColl’s offer last week.
McColl’s said in an update to the London Stock Exchange: “The group confirms that it recently received an approach for the entire business, which was subsequently withdrawn.
“There have been no further discussions with that party or any other party regarding an offer for the entire business. In addition, the Group has also received indications of interest in parts of the business.
“The board will consider all options with the aim of maximizing value for all stakeholders.”
McColl’s Retail Group PLC shares fell 11% today as news of the possible collapse continued to dominate the headlines.
https://www.mirror.co.uk/money/mccolls-confirms-rescue-talks-scrambles-26359383 McColl's confirms rescue talks as it tries to save 1,100 stores from collapse