Wed, 17 Jan 2018 | ADMINISTRATION
Children's toy company Toys R Us is just days from entering administration unless it can find £15 million in rescue funding, according to news reports.
Bosses in charge of the British arm of the international chain are currently searching for investors as they face the prospect of paying a £15 million VAT bill with a deadline of 27th February 2018.
Should the company fail to secure the financial help it needs it will fall into administration at the end of the month, following in the footsteps of its US and Canada-based parent company, which declared bankruptcy last year.
In a bid to avoid the same fate, the company attempted to push through restructuring plans under a company voluntary agreement (CVA). However, this process was halted due to a £30 million deficit in the company's pension scheme.
As a result, the company required approval from the Pension Protection Fund (PPF), which demanded the company add £3.8 million to its pension pot this year and an additional £6 million across 2019 and 2020.
Commenting on the outcome, managing director of Toys R Us UK, Steve Knights, said: "The vote in favour of the CVA represents strong support for our business plan and provides us with the platform we need to transform our business so that we can better serve our customers today and long into the future."
It is hoped that this new approach will allow the company to continue trading while protecting the rights of past and present workers. However, the bankruptcy of its parent firm across the pond suggests that the threat of administration is still looming.
Despite concerns, Mr Knights says he is remaining positive, adding: "This offer goes a long way to addressing the PPF’s concerns and in de-risking the pension scheme, offering greater protection for the current and retired members in the pension scheme."
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