McColl‘s collapses but Morrisons buys it out of administration

Moments after the city was told that convenience retailer McColl’s had been formally placed in administration PwC, Morrisons bought out of the administration that saves 16, 000 jobs and its 1, 100 stores across UK, beating petrol station powerhouse EG Group.  The also rescues the group’s two pension schemes which have more than 2, 000 members. “On appointment, the joint administrators completed a sale of the business and assets of the group to Alliance Property Holdings Limited, part of the Morrisons Group, the group’s largest supplier.” McColl’s store portfolio includes around 270 stores under the Morrisons Daily brand. McColl’s lenders repaid all £160m of outstanding debt immediately and in full.  Morrisons agreed with creditors to settle debts including a £10m unpaid VAT bill. Morrisons Britain’s fourth-biggest supermarket, beat the billionaire Issa brothers EG Group, behind Asda in a bidding war.

The McColl’s board failed to submit the EG Group takeover for approval by judges before the courts closed on Friday. Court approval was needed because EG Group planned to acquire the company through a pre-pack sale – a type of insolvency that allows a business to be sold immediately after administrators are appointed.  The failure to file documents on time appears to have played a critical role in re-opening the door for Morrisons, who submitted a counterbid on Saturday lunchtime although each party was given a 6 pm deadline on Sunday to make the best and final offers.

 

 

Morrisons CEO David Potts said: “ Although we are disappointed that the business was put into administration, we believe this is a good outcome for McColl’s and its stakeholders.