Poundland secures more time to find a buyer as rescue talks continue
Poundland is headquartered in Walsall
Poundland, headquartered in Walsall, has secured additional time to negotiate a rescue deal as it faces the threat of insolvency.
According to court documents, the retailer has applied for a second notice of intention to appoint administrators after the first expired last Thursday.
This gives Poundland an extra 10 working days to secure a rescue deal with creditors.
Funding has been agreed to keep shops open and operational during this period.
Gordon Brothers, the owner of Poundland, is facing political pressure to secure the chain's future, with MPs accusing the firm of cutting off funds deliberately.
Prime Minister Andy Burnham has urged executives to collaborate with the Government to save jobs and shops.
Around 11,000 jobs and 600 shops across the UK are under threat.
Gordon Brothers claimed it is in discussions with three potential buyers for the entire business.
A spokesperson said: “We are in discussions with three parties for a sale of the whole business and we have also received several offers from established high street retailers for significant parts of the business.
“While our preference remains a sale of the whole company, we are taking due care to ensure that any successful offer can provide the funds required to acquire the business and see it through to sustainable cash generation.”
The board extended the notice period to appoint administrators to identify the best options available for shareholders, creditors, and employees.
“Our stores remain open as usual during this period and we thank our colleagues, suppliers and customers for their incredible and continued support,” they stated.
Poundland’s executives held a private meeting with Parliament’s business committee.
Committee chairman Liam Byrne said Gordon Brothers had “taken millions of pounds out of Poundland when the business was on a knife edge.”
There were “concerning signs it’s been strangled of access to its own funds,” he added.
Gordon Brothers acquired Poundland for £1 last year and initiated a sale process this September.
They stated £85 million in new financing has been supplied, “stepping in when no-one else was willing to finance the company” and supporting its turnaround efforts.
Efforts have focused on providing value to the company and supporting its workforce, "not prioritising one over the other," they stated.
Discussions with prospective buyers, including Tesco, Iceland, and Lidl, involve proposals to buy up to 150 stores and other parts of the business.
Investment firm Xyra Holdings has emerged as a potential buyer, while Irish firm Martin Property Group remains interested, despite a previously rejected offer.
If a rescue deal is not successful, administrators may be appointed, and AlixPartners is understood to be lined up for the role.