The billionaire brothers, who are behind one of Britain’s largest fuel retail empires, are close to completing the latest raid on McColl’s Retail Group, which could result in the loss of thousands of jobs.
Sky News has learned that on Friday EG Group completed the takeover of McColl’s through the administration on the fact that it would usurp a competing bailout offer from Morrisons, a supermarket chain.
EG’s shareholders are identical to Asda’s shareholders, fellow Morrisons headquartered in Yorkshire, a competitor in food retail.
McColl’s confirmed in a dinner announcement on the London Stock Exchange that it should appoint PricewaterhouseCoopers (PwC) as administrator, confirming a Sky News report on Thursday.
It says his “senior creditors this morning refused to further extend the waiver of the company’s banking agreements … in anticipation that they intend to sell the business to a third-party buyer as soon as possible.”
Insiders have confirmed that this third party is the EG Group, although there have been speculations that Morrisons – which has a broad partnership with McColl’s – could seek a court injunction to prevent the deal.
McColl’s creditors, among whom are supported by taxpayers NatWest Group, are said to have demanded immediate repayment of their loans, which EG is said to have agreed to.
According to a proposal to save competitors from Morrisons, published by Sky News earlier on Friday, lenders would have to see their loans taken by the supermarket chain and fully repaid – but within a few years.
One source said EG’s proposal would result in lenders receiving 90 pensions in pounds, while another suggested they would be repaid in full.
McColl’s decision to summon administrators will have implications for members of the company’s pension scheme and may raise questions about why the solvent alternative proposed by Morrison was not accepted.
There may also be questions about PwC’s dual role as McColl’s creditors adviser and as an administrator if the crisis leads to worse results in terms of job retention and retirement benefits.
It was unclear how many of McCall’s 16,000 employees would retain their jobs on the deal with the EG Group.
McColl’s is an important partner of Morrisons, which operates hundreds of small stores under the Morrisons Daily brand.
Sky News reported in February that McColl’s is seeking new funding that would allay concerns about its future.
The company, which is listed on the London Stock Exchange, employs about 6,000 people on a full-time basis.
He raised £ 30 million from shareholders just eight months ago.
In Scotland it trades under the name RS McColl.
McColl’s move to administration makes it the UK’s largest insolvency insolvency by labor force since the Edinburgh Woolen Mill Group collapsed in 2020.
Since then, both Debenhams, which employed about 12,000 people, and Sir Philip Green’s Arcadia Group, which numbered about 13,000, have also collapsed, falling victim to changing retail habits and pandemics.
McColl shares have collapsed this year, and existing capital is now worthless.
Jonathan Miller, the recently retired CEO of Jonathan, is believed to have personally invested £ 3 million in fundraising last summer to persuade other shareholders to support the company.
A Morrisons spokesman said of the crash: “We have put forward a proposal that would avoid today’s announcement that McColl’s is being transferred to the administration, would keep the vast majority of jobs and stores safe, and fully protect retirees and creditors.
“For thousands of hard-working people and retirees, this is a very disappointing, harmful and unnecessary result.”
EG could not be reached for comment, and NatWest declined to comment.
Contact PwC for comment.
A spokesman for McColl’s pension scheme trustee said: “Pension schemes are important stakeholders in the company, and trustees are urging all potential bidders to make it clear that they will respect the pension promises given to 2,000 McColl’s members and its subsidiaries and not will seek to sever the link between the schemes and the company. ”
They added: “Trustees continue to work closely with the Pension Regulator to determine how best to protect scheme members. They will continue to work with stakeholders to protect members’ interests and will keep members informed.”