16,000 jobs at risk after shop chain founded by former Newcastle United striker collapses
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The troubled retailer held talks with its lenders on Friday morning in the hope that it could extend its loan agreements.
Supermarket giant Morrisons also tabled a last minute effort to buy the business, which is said would have “kept the vast majority of jobs and stores safe” .
However McColl’s has confirmed that “the lenders made clear that they were not satisfied that such discussions would reach an outcome acceptable to them”.
The company said it hopes the administrators will help to “implement a sale of the business to a third-party purchaser as soon as possible”.
It is understood that EG Group, whose owners bought Asda for £6.8 billion early last year, are favourites to buy the company from administration – with the group intending to keep all of McColl’s stores.
Under the proposed Morrisons rescue deal, the supermarket chain would have taken on the business as a going concern, absorbed its debts of over £100 million and taken responsibility for the company’s pension scheme.
The two businesses are major partners, with McColl’s operating hundreds of convenience shops under the Morrisons Daily brand.
Morrisons, which was bought by a US private equity firm last year, said the administration is a “disappointing” outcome.
A spokeswoman said: “We put forward a proposal that would have avoided today’s announcement that McColl’s is being put into administration, kept the vast majority of jobs and stores safe, as well as fully protecting pensioners and lenders.
“For thousands of hardworking people and pensioners, this is a very disappointing, damaging and unnecessary outcome.”
On Thursday evening, McColl’s had said it was in talks over “potential financing solutions” to resolve its funding issues.
Shares in McColl’s were suspended earlier this week after the company delayed the publication of its latest financial results due to its financing talks.