// The move comes as McColl’s raised £30 million from shareholders in a cash call just six months ago
// The group carries around £170 million of debts
Convenience retailer McColl’s is reportedly scrambling to secure new funding to prevent a collapse that could put around 16,000 jobs at risk.
According to Sky News, the symbol group retailer had limited time to secure new funding, with millions of pounds of its bank debt being sold to hedge funds and few “obvious options to guarantee its future”.
The move comes as McColl’s raised £30 million from shareholders in a cash call just six months ago, followed by the expansion of Morrisons Daily stores from 350 to 450 within a year in November.
READ MORE: Sainsbury’s poaches new fresh food boss from McColl’s
If the retail group which carries around £170 million of debts, were to collapse, it will result in 16,000 employees, with 6,000 of them on a full-time equivalent basis.
Asda owners, EG Group‘s Mohsin and Zuber Issa and the private equity firm TDR Capital, have reportedly held discussions about making an offer for group, which operates 1,100 newsagents and convenience stores, but decided against doing so earlier this week, Sky News said.
However, Morrisons, which agreed to a £7 billion sale to the private equity firm Clayton Dubilier & Rice last year, is said to be monitoring McColl’s situation closely with a “view to possibly acquiring hundreds of its stores out of insolvency.”
The news comes as Morrisons owner CD&R opted not to make an offer for beauty retailer Boots, according to Reuters.
The move comes as the CMA is still probing the supermarket’s takeover and has ruled out the private equity firm integrating other businesses with Morrisons.
Morrisons declined to comment.
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4 Comments. Leave new
I can see Morrisons buying them up, for many years they have tried to get into local convenience and have failed when doing it themselves so this would be an ideal fit and will allow them to have a business which has pricing, location, and range correct which is what they struggled to do themselves.
The McColls around here has such expensive prices compared to the rest of the shops, I am not surprised in the least they are facing difficulty’s, I avoid them like the plague…
Very expensive with dirty stores and some very lazy staff. Not surprised they are in difficulties
To be honest it doesn’t surprise me that McColls are in this position.
They have no care for their staff, customers or stakeholders. When they raised £30m the directors awarded themselves shares as part of their long term bonus scheme.
They increase the workload on the staff, cut their hours then berate them daily. The support network for staff is non existent. Just read reviews on indeed to see what ex team members feel about them.
Google McColls fines and you will see they have a history, they have never changed their ways they operate stores on a shoe string budget.
At least when the administrator’s come in they will see how mismanaged this company is…