// A £50m emergency loan to Sir Philip Green’s embattled Arcadia Group falls through
// The loan had been offered by Mike Ashley’s Frasers Group over the weekend
// It’s thought that Arcadia Group could enter administration today
Mike Ashley’s plans for an emergency £50 million loan to Sir Philip Green’s struggling Arcadia Group have reportedly fallen through.
Green’s retail empire, which includes the Topshop, Dorothy Perkins and Burton brands, was recently revealed to be on the brink of collapse with around 15,000 jobs at risk.
Senior sources at the company have told BBC News that they do not expect a last-minute rescue deal, which had been flagged by Ashley’s Frasers Group over the weekend.
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Arcadia Group is expected to fall into administration today, the BBC said, with Deloitte to be appointed as administrators in the coming days.
The offer from Frasers Group, which runs Sports Direct, House of Fraser and Jack Wills among others, amounts to a £50 million loan, Ashley’s company confirmed.
“The company can confirm that it has made an offer and provided draft terms to the Arcadia Group for a loan of up to £50 million and is now awaiting a substantive response,” Frasers Group said.
“Should the Company and the Arcadia Group’s efforts to agree an emergency funding package fail and the Arcadia Group enter into administration, the company would be interested in participating in any sale process.”
Sky News quoted Frasers Group chief financial officer Chris Wootton as saying: “We hope that Sir Philip Green and the Arcadia Group will contact us today to discuss how we can support them and help save as many jobs as possible.”
Arcadia Group had been in emergency talks with lenders in a bid to secure a £30 million loan to help shore up its finances.
If the administration is confirmed, it is expected to trigger a scramble among creditors to get control of company assets.
Arcadia Group’s pension scheme is likely to have the biggest claim on proceeds generated by Deloitte.
It is the latest retailer to have been hammered by the closure of stores in the face of coronavirus, with rivals including Debenhams and Edinburgh Woollen Mill Group all sliding into insolvency since the pandemic struck in March.
There is a chance Arcadia Group’s stable of fashion retailers could become online-only, in the same vein as Oasis & Warehouse after it went into administration and was bought out by Boohoo Group.
Arcadia Group has more than 500 retail stores across the UK with the majority of these currently shut as a result of England’s four-week lockdown, which will end mid this week.
Earlier this year, Arcadia Group revealed plans to cut around 500 of its 2500 head office jobs amid a restructure in the face of the coronavirus crisis.
Meanwhile in September the former London headquarter for Burton was put up for sale in a bid to seek fresh funds for the company.
In addition, last year Arcadia Group launched a CVA which saw it close down several stores – including Topshop sites the US.
However, Green was only able to secure that CVA after he pledged a package of assets worth more than £400 million to Arcadia Group’s pension scheme.
Speculation of another restructure at Green’s retail empire has been circulating for months.
with PA Wires
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