// Morrisons committed a total of £190.1m to rescue convenience chain McColl’s
// McColl’s fell into administration earlier this month after its lenders objected to a sale to Morrisons
Administrator PwC said in a letter to creditors that the supermarket’s rescue package for its convenience and wholesale partner amounted to £182.1m, with a further sum of up to £8m to pay unsecured creditors.
Morrisons eventually won a shootout after winning a battle against Asda owner EG Group, (termed ‘Party A’ in the administrator’s letter) to rescue the convenience chain, taking it out of pre-pack administration on Monday 9 May.
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Had administrators been officially appointed on Friday 6 May, the letter says Party A’s (EG Group) offer would have been accepted.
Instead, PwC’s official court appointment on 9 May gave Morrisons time to increase its bid over the weekend, with both parties submitting final offers by 6.30pm on Sunday 8 May.
Administrators said while Party A’s offer was “materially higher” than that of Morrisons, the total dividend for unsecured creditors was estimated to be up to 50% higher under the supermarket’s proposal given Morrisons’ existing creditor balance.
Administrators also stated that both Party B and Party C were involved in rescue talks, but neither were able to make firm offers.
On 6 May McColl’s collapsed into administration after negotiations between Morrisons and the convenience chain’s lenders failed to reach an agreement that would have seen the lenders writing off a portion of the debt they were owed.
The eventual deal saw these lenders repaid in full.