Thu, 07 Jun 2018 | BUSINESS SALE
Poundworld's private equity owner TPG has revealed that the firm faces collapse unless a new buyer is found after a potential purchaser backed out of the race to secure the discount chain.
According to reports, Deloitte, which has been responsible for handling the sale of the chain, has also been putting together plans for an administration in case TPG fails to find the right buyer in the near future.
Deloitte has confirmed that a sale via a pre-pack administration could be an option for the company, but this approach would put at risk the jobs of all 5,500 staff members currently working for Poundworld and is currently the least favoured option when it comes to the future of the chain.
Despite concerns over the potential failure of the sales process, TPG initially attempted to rescue the company from its difficult financial situation by pursuing a company voluntary arrangement (CVA), a form of insolvency that would have allowed it to reduce its financial difficulty by closing stores. However, interest from prospective buyers including Alteri suggested a sale may be the more appropriate route.
Following the decision of Alteri to walk away from the sale, the Santander-led sale process has now entered an accelerated phase as TPG seeks to find a new purchaser in a short space of time.
According to The Press Association, a failure at this stage to track down an appropriate new owner could result in the collapse of the firm, with its losses already significantly increased from £5.2 million in 2015-16 to £17.1 million in 2016-17 and set to rise further in the next 12 months.
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