Poundland is believed to have secured an extra £10 million in funding as the high street retailer scrambles to find a rescue deal. It is understood that Poundland’s owners have enabled the release of around £10 million worth of funding to be used for things such as paying suppliers of stock, Sky News reports.
The struggling retailer filed a notice of intention to appoint administrators at the end of October. This gave the business 10 days to secure a potential rescue deal, which will expire at midnight.
Extension expected as talks continue
It is understood a deal has not yet been reached, but the company is expecting to get an extension which would allow more time, according to sources cited by the BBC. Any extension to Wednesday’s deadline could mean that the prospect of a deal satisfying the company’s creditors remains on the table.
If not, then it is expected that administrators would be appointed – with corporate advisory firm AlixPartners understood to be lined up. This would threaten the future of its roughly 600 shops and 11,000 employees.
Potential buyers in talks
Advisers have been in talks with parties interested in buying the brand or parts of the business such as swathes of shops. Poundland has held talks with potential bidders, including Tesco, over proposals to buy up to 150 shops, and other chains such as Iceland and Lidl.
Investment firm Xyra Holdings has emerged as a potential buyer for the entire business, while Irish real estate firm Martin Property Group is believed to remain interested in a deal. Gordon Brothers previously rejected a takeover offer from Martin Property Group, but management named Martin Property Group its preferred bidder last month.
MPs to question owners
Poundland’s US owners are also set to give evidence to MPs in private next week as talks continue over the future of the discount chain. Earlier this week, Liam Byrne, chairman of Parliament’s Business, Innovation, Science and Trade Committee, called on bosses at Gordon Brothers – which bought Poundland for £1 last year – to face questioning over its stewardship of the business.
Sky News reported earlier on Friday that the US investment firm sought to have an evidence session behind closed doors to avoid it becoming "a show trial". Mr Byrne confirmed that the committee will permit a private session in "the first instance" following assurances last Thursday that Gordon Brothers is holding talks to seek a sale deal which could preserve jobs at Poundland.
He added: "Since we asked Gordon Brothers to appear before Parliament, we’ve been in daily contact and we understand they are now in active talks with several credible buyers about selling Poundland as a going concern. We want those talks to succeed and we want to understand what I know will be highly sensitive commercial information in detail. When you own a retailer of this size, the decisions you take in the boardroom are felt in homes and on high streets up and down the country. Parliament must know that every step possible is being taken to save the business."
