Cornershop chain McColl’s is SAVED from closure after Morrisons swoops in to save 16,000 jobs
CORNERSHOP chain McColl’s has been saved from closure after Morrisons swooped in to save 16,000 jobs.
Morrisons has beaten EG Group in the battle to buy collapsed convenience chain.
The supermarket made a final last-minute offer on Sunday to save McColl's from going under.
It has now seized control of the retail group, according to
Morrisons saw off a rival bid from the EG Group after it tabled an 11th hour improved bid.
The news will come as welcome relief to McColl’s 16,000 employees who had been facing redundancy.
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Under the deal, it's reported that staff will keep their jobs and all 1,100 shops will be saved.
Outstanding pension commitments will also be honoured.
Morrisons had already agreed to take on McColl's debts, but it is now understood to be willing to pay McColl's lenders in full, straightaway, matching a similar pledge thought to have been made by EG Group.
Morrisons' status as a major creditor of McColl's is also understood to have been influential, according to the report.
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The Sky News report says the deal will be structured as a "pre-pack administration", meaning Morrisons will buy McColl's immediately after it enters insolvency proceedings.
The news comes after a weekend of high drama in the tussle to gain control of McColl's.
On Friday evening it had looked as if the EG Group were poised to win the battle after McColl's lenders rejected a bid from Morrisons.
The lenders, which include Barclays, HSBC and state-backed NatWest Group, were seeking immediate repayment of their loans, leading them to favour EG Group.
McColl's has struggled badly during the pandemic due to supply chain issues, inflation and a heavy debt burden.
Earlier this week, it was revealed the group was set to have its shares suspended from the London Stock Exchange as bosses said they would be unable to get its accounts signed off by auditors in time.
Shares in the company had already plunged as it reported last month that talks with its lenders and banks would likely leave shareholders empty-handed under rescue efforts.
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McColl's had previously announced it was going into administration, appointing PriceWaterhouseCoopers (PWC) as administrators.
Reports suggested that McColl's had notched up £170million of debt.
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