McColl’s administration ‘increasingly likely’ despite last-ditch rescue talks

// McColl’s has admitted that administration is “increasingly likely”

// The group remains in talks to try to resolve its “short-term funding issues”

Convenience store retailer McColl’s has admitted that it is “increasingly likely” to fall into administration as it enters last-ditch talks to resolve its “short-term funding issues”.

The retailer said: “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.”

However, McColl’s said even if it is sold, it would result in “little or no value being attributed to the group’s ordinary shares”.

The convenience store chain, which operates more than 1,100 branches across the UK, has been scrambling to secure new funding to stave off administration over recent weeks.

The business has suffered due to supply chain issues, inflation and its debt burden.

If McColl’s collapses into administration around 16,000 jobs would be put at risk.

The c-store retailer had been in takeover talks with the Issa brothers in February, however, the Asda owners are understood to have decided against bidding for McColl’s.

READ MORE: Morrisons hires advisers to consider options for McColl’s

Morrisons is thought to be vying to minimise it’s exposure to the collapse of the c-store retailer.

The pair run the Morrisons Daily joint venture that now extends to more than 200 shops and had planned to double that number in the coming years.

Morrisons hired advisers Houlihan Lokey last month to explore options for McColl’s, although it was not clear whether this would lead to a takeover bid or Morrisons acquiring sites as part of a break-up or insolvency process.

McColl’s has been under increasing pressure. It issued a profit warning last month as it said the cost-of-living crisis had led to softer Easter Trading.

Long-standing chief executive Jonathan Miller stood down in March after more than three decades with the convenience store retailer. Chief operating officer Karen Bird took over as CEO.

McColl’s revealed earlier this week that its shares are to be suspended from the London Stock Exchange as bosses said they would be unable to get accounts signed off by the auditors in time.

Click here to sign up to Retail Gazette‘s free daily email newsletter