he future of McColl’s is hanging in the balance as its lenders weigh up rival bids to take over the convenience chain.
Morrisons and EG Group, backed by the billionaire Issa brother who also own Asda, are battling to outbid one another as admiinistration looms for McColl’s.
The business admitted on Friday that it is likely to collapse without any fresh funding. PwC has been lined up to act as administrators.
Sources close to the company said a notice of administration could be placed with the courts as early as today if the latest bids to take over the company are rejected.
On Thursday night, Morrisons tabled a last-minute bid to rescue McColl’s from administration. The plan would save around 16,000 jobs and allow most of the 1,300 high street stores to stay open.
It is likely to be structured as a solvent deal, rather than a pre-pack administration, with Morrisons taking on McColl’s pension liabilities and around £170 million of debt.
EG Group, backed by the billionaire Issa brothers, then emerged with a potential pre-pack deal and promised to repay lenders’ loans immediately – improving the Morrisons offer.
Morrisons lodged a counter offer over the weekend, also promising to repay lenders immediately and in full.
PwC, which is advising McColl’s lenders, could stage a final two-way battle between the potential suitors.
McColl’s has been pushed to administration by soaring costs and supply chain problems.
Last week, the retailer warned trading of its shares was set to be suspended after the company admitted that its ongoing emergency funding talks mean it will miss the deadline to file annual accounts.
It previously raised £30 million from shareholders to boost its presence through its existing partnership with Morrisons, but said that the business was still reeling from being hit by diminished footfall in the coronavirus pandemic.