Morrisons have triumphed in the battle to buy bankrupt retailer McColl’s after reaching an agreement with creditors to settle debts, including a £10million tax bill.
Some 16,000 jobs in 1,100 stores have been saved following the takeover by Britain’s fourth-largest supermarket, which beat the billionaire brothers behind Asda in a bidding war.
City sources said Morrisons’ final bid for McColl’s meant lenders would be repaid in full, along with secured creditors such as HM Revenue & Customs. It is understood McColl’s owed around £10million in unpaid VAT.
McColl’s pension plan, which has more than 2,000 members, welcomed the takeover after Morrisons promised to honor pension fund obligations.
The company called in directors last week after initial talks with Morrisons over a solvent takeover failed. This plan was rejected by lenders who owed £165m as they would have to wait until 2025 before being repaid.
Morrisons was then targeted by EG Group, the petrol station empire controlled by the billionaire Issa brothers, who also own Asda. They promised to repay lenders in full and offer young workers big pay rises.
However, Morrisons came back and ultimately triumphed by offering creditors a better deal.
David Potts, Managing Director of Morrisons, said: “We believe this is a good result for McColl’s and all of its stakeholders. This transaction provides stability and continuity for McColl’s business and, in particular, a better result for its colleagues and retirees.
“We all look forward to welcoming many new colleagues to the Morrisons business and building on the proven strength of the Morrisons Daily format.”
A spokesperson for the pension scheme said: ‘The trustees welcome the announcement that Morrisons will continue to support the schemes following its acquisition of the McColl’s business. Directors will continue to engage with all stakeholders to ensure member benefits are protected after the transaction closes. »
Rob Lewis, co-director of PwC who oversaw the sale, said: “Especially in the current economic climate, the completion of this transaction provides much-needed certainty to McColl’s 16,000 employees after a period of understandable concern following the challenges of the group over the past few months.. All in all a really positive result.
McColl’s board reportedly failed to submit the EG Group takeover for court approval before the courts closed on Friday.
Court approval was needed as EG Group planned to acquire the business through a ‘pre-pack’ sale – a type of insolvency that allows a business to be sold immediately after directors are appointed .
Failure to file documents on time appears to have played a pivotal role in reopening the door for Morrisons.
Morrisons submitted a counter-offer on Saturday midday. The two sides were then given a 6 p.m. deadline on Sunday to make “best and final” offers.
EG Group’s offer would originally have included moving McColl’s pension fund, which has 2,000 members, into the pension protection scheme lifeboat.
However, EG Group said on Monday that its final offer “proposed to maintain the link between McColl’s pension plans and the company.”
The change follows a call from pension administrators to Kwasi Kwartang, the Business Secretary, and Therese Coffey, the Work and Pensions Secretary, to intervene amid fears that scheme members will be hit by payment reductions of up to 10%.
A spokesperson for EG Group said: “Our proposal would have protected the UK jobs of 16,000 McColl colleagues, raised the pay of all hourly paid colleagues aged 18 and over to £10.05, maintained all stores currently in operation and ensured the continued provision of invaluable community services, such as Post Office counters.
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Source: www.telegraph.co.uk
This notice was published: 2022-05-09 18:15:15
