Morrisons in rescue talks with McColl's, which has Southwell store, amid risk of administration
A major retailer is in rescue talks with Morrisons as it faces the possibility of administration.
McColl's has been in discussions with potential lenders to shore up the business, which struggled badly during the pandemic due to supply chain issues, inflation and a heavy debt burden.
McColl's, which has a Southwell store, is likely to enter administration if the talks are unsuccessful.
The business has some 16,000 employees across the UK, the majority of whom are part-time, a spokesman said.
Morrisons has put forward a last-ditch deal to try to save McColl's from collapse.
It is understood the proposals put forward by Morrisons protect the pension scheme, and would preserve most staff.
In a statement in which McColl's described itself as the UK’s leading community retailer, a spokesman said: “As previously disclosed on April 25, 2022, the group remains in discussions regarding potential financing solutions for the business to resolve short-term funding issues and create a stable platform for the business going forward.
“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.”
The spokesman said a further update would be made as and when appropriate.
Earlier this week, it was revealed the group was set to have its shares suspended from the London Stock Exchange as bosses said they would be unable to get its accounts signed off by auditors in time.
Shares in the company had already plunged as it reported last month that talks with its lenders and banks would likely leave shareholders empty-handed under rescue efforts.
The group runs more than 1,100 convenience shops across England, Scotland and Wales.