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Mike Ashely’s Frasers Group reportedly working on £50m rescue loan for Arcadia

// Frasers Group said to offer £50m emergency loan for Arcadia
// Sir Philip Green’s Arcadia Group retail empire could appoint administrators next week
// Green family called on to “make good” on estimated £350m pensions fund deficit if group does fall into administration

Mike Ashley’s Frasers Group is believed to be working on a £50 million rescue package for Arcadia Group in order to keep the retail giant float, according to Sky News.

With widespread reports that Arcadia could be on the verge of appointing administrators, Ashley’s Frasers Group is thought to be working on an emergency loan for the business.

“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,” Frasers’ chief financial officer Chris Wootton told Sky News.

READ MORE: 15,000 jobs at risk as Sir Philip Green’s Arcadia Group faces collapse

A source close to the deal cited by Sky News said the proposal is likely to be in the form of a secured loan, aimed at preventing Arcadia from falling into administration.

While it’s not clear whether a plan for the administration has been finalised, an Arcadia Group spokesperson confirmed last week that it was “working on a number of contingency options” to secure the future of its stable or retail fascias, which includes Topshop, Topman, Dorothy Perkins, Burton, Wallis, Evans and Miss Selfridge.

If Arcadia were to fall into administration, the move would potentially place 15,000 jobs at risk and 500 stores at risk of closure.

Fears have also been raised over Arcadia’s pension fund, which has an estimated deficit of £350 million.

In the instance that administrators are called in, the group’s pension fund will be taken on by The Pensions Protection Fund.

Members who have not reached the scheme’s normal retirement age at the point of administration could lose 10 per cent of their payouts.

Yesterday chairman of the work and pensions select committee Stephen Timms called on the Green family to “make good” the deficit in the pensions fund, according to the Telegraph.

“This is a dreadful time for Arcadia staff to be worrying about their jobs and their pension.  “Whatever happens to the group, the Green family must make good the deficit in the Arcadia pension fund,” Timms said.

The chairman added that he would be prepared to call Sir Philip before the committee if needed.

“I hope it is not going to come to that, but if we have to, of course we will be prepared to,” Timms added.

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