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16,000 jobs at risk as McColl’s battles insolvency fears

// 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.

Retail Gazette has contacted Morrisons for comment.

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The post 16,000 jobs at risk as McColl’s battles insolvency fears appeared first on Retail Gazette.



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