Thousands of jobs at risk as convenience store giant McColl teeters on the brink of collapse | Business Newsletter

McColl’s Retail Group, one of Britain’s largest convenience store chains, is on the verge of collapse, putting thousands of street jobs at risk.

Sky News has learned that McColl’s, has a wide country partnership with supermarket giant Morrisonscan call the administrator as early as Friday.

The company’s impending demise is expected to spark renewed interest in the partial acquisition of Morrison’s and EG Group, the petrol retail giant owned by TDR Capital and two brothers Issa billionaires are Mohsin and Zuber.

Retail industry sources said on Thursday that the situation remained stable but the collapse of some form of bankruptcy proceedings now more likely than not.

However, one person warned that a rescue deal was still possible and said that ongoing negotiations over McColl’s future could mean the appointment of administrators being delayed after the end. this week.

Sky News reported in February that McColl is scrambling to secure new funding that should ease concerns about its future.

The company is listed on the London Stock Exchange and employs about 16,000 people, or about 6,000 full-time employees.

It raised £30m from shareholders in a cash call just eight months ago.

McColl trades from around 1,100 convenience stores and newsstands across the UK, with around 200 of which currently do business under the Morrisons Daily format through a partnership with the supermarket giant.

In Scotland, it trades under the name RS McColl.

Earlier this week, they warned that their shares would be suspended at the end of May because it would not be able to meet the statutory deadline for filing annual results.

Morrisons is said to have proposed a rescue deal to McColl’s lenders in recent weeks that could involve their banks taking on their debt, with the supermarket chain injecting more capital. new.

That proposal is not believed to have gained traction, according to insiders, although a modified version of it could still emerge.

Administrators are said to be ready to oversee McColl’s demise, though it’s unclear which company will secure Thursday night’s appointment.

In November, McColl’s announced that it would expand Morrisons Daily conversions from 350 to 450 within a year.

If McColl’s were forced into management, it would be the biggest UK retail default by workforce size since the collapse of the Edinburgh Woolen Mill Group in 2020.

Since then, both Debenhams, which employs around 12,000 people, and Sir Philip Green’s Arcadia Group, which has a workforce of around 13,000, have also gone bankrupt, becoming casualties of changing retail shopping habits. and pandemic.

McColl’s shares have collapsed this year and the entire company is now worth just under £3.5 million.

The company is saddled with nearly £170m in debt, with a lender including Barclays, HSBC, NatWest Group and Santander UK.

Jonathan Miller, McColl’s recently departed chief executive officer, said in December that the fiscal year “is certainly a tough year for business, starting with the impact of COVID-19 restrictions and ending with the impact of COVID-19 restrictions. end with widely reported and ongoing supply chain challenges”.

“While we were able to partially mitigate these externalities, they still have a significant impact on the underlying trading,” he added.

Mr Miller is said to have invested £3m in a fundraiser last summer to convince other shareholders to back the company.

McColl’s said in a statement: “As previously disclosed on April 25, 2022, the Group is still discussing potential corporate financing solutions to address short-term funding issues. and create a stable foundation for future business.

“However, while no decision has been made yet, McColl’s confirms that unless an alternative can be agreed in the short term, it is increasingly likely that the Group will be brought into administration. with the objective of achieving the sale of the Group to a third-party purchaser and securing the interests of its creditors and employees.Even if a successful outcome is achieved, the Group’s common stock may also be subject to change. results in little or no value.”

Morrisons declined to comment, while the EG Group has been contacted for comment.