The country’s peak pensions fund is reportedly demanding Toys R Us make a £9 million payment into its UK pensions scheme in order for its restructuring scheme to be approved.
According to Sky News, the Pension Protection Fund (PPF) and the scheme’s trustees want the sum to be agreed within the next 24 hours and the outcome could potentially determine Toys R Us’ future in the UK.
The sum reportedly equates to four years of employers’ contributions, as well as related levy payments.
A deadline for a vote on a company voluntary arrangement (CVA) is approaching, and as revealed last week, Toys R Us’ plans to restructure its UK business could face decisive opposition from the Pension Protection Fund (PPF).
It comes as the pension trustees recently drafted PwC to advise them on the toy retailer’s proposed CVA, which involves closing 26 of its 100 UK stores and making around 500 members of staff redundant.
In order for the restructuring proposals to go ahead, the CVA will need the approval of a 75 per cent majority of creditors.
The PPF holds around 20 per cent of the creditors’ votes eligible to be cast in the CVA, which means it could carry a decisive vote.
The PPF has not officially confirmed how they would vote on the restructure proposal.
The proposed CVA comes after Toys R Us’ US division filed for Chapter 11 bankruptcy in September, having amassed £3.6 billion in debt.
Toys R Us UK is also thought to have made losses in seven out of the last eight years.