Billionaire brothers Isa, who owns Asda, have launched an offer to save McColl’s after the chain collapsed in the administration with debts of 97 million pounds
- The chain of convenience stores has raised the prospect of a wave of layoffs and store closures
- She fell into the administration for debts of £ 97 million, which she could not afford to service
- Morrisons offers to take on his debt and save him from collapse
From Archie Mitchell’s business correspondent for the Daily Mail
Posted: 01:25, 7 May 2022 | Updated: 01:27, 7 May 2022
The billionaire brothers who own Asda made an offer to save McColl’s after it collapsed yesterday.
The convenience store chain, which employs 16,000 people and has 1,100 stores, has fallen into disrepair over £ 97 million in debts it could not afford to service.
This has raised the prospect of a wave of layoffs and store closures, which will be another devastating blow to the main streets.
Morrisons, the UK’s fourth-largest supermarket chain and sole supplier to McColl, has offered to bail out the business, offering to take over its debt and save it from collapse.
The chain of convenience stores, which employs 16,000 people and has 1,100 stores, has fallen under administration for £ 97 million in debts it cannot afford to service.
Under the partnership agreement, McColl’s has already converted 254 of its stores to Morrisons Daily. But creditors rejected Morrisons’ approach and McColl-appointed accounting firm PwC to manage the administrative process and find a buyer for the business.
Blackburn-born Mohsin and Zuber Isa, who own Asda and the EG gas station group, are believed to have struck a deal with McColl’s creditors that will force them to pay off the convenience chain’s debt by taking ownership of the business.
The Morrisons offer would protect the “vast majority” of McColl staff and shops and would protect his £ 141 million retirement plan. Morrisons challenged the decision to appoint administrators, saying: “We have put forward a proposal that would avoid today’s announcement that McColl’s is being introduced into the administration, will keep most jobs and shops safe, and will fully protect retirees and creditors.
“It’s a very disappointing, damaging and unnecessary result.”
But critics said Morrisons had years to approach McColl’s. A source close to the Isa brothers said the EG Group had agreed to keep all McColl staff and its stores, unlike Morrisons, who takes on the “vast majority”.
The deal could be completed next week. EG Group is one of the largest British oil empires, with 959 sites in the United Kingdom and Ireland.
Shares fell 92% from November to just 1.75 points. Morrison’s suggestion would make them useless.
McColl’s alerted in November to a shortage of key products, truck drivers and distribution center workers.
It issued a series of warnings about sales and profits, and in February it became clear that it was on the verge of collapse.
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