Poundland secures more time to find buyer as rescue talks continue
The retailer has an extra 10 working days of breathing space from creditors to secure a potential rescue deal.
Poundland has given itself more time to thrash out a rescue deal for the business as it battles to stave off the threat of insolvency.
Court documents show the retailer has applied for a second notice of intention (NOI) to appoint administrators after the first one expired on Thursday.
This gives the retailer an extra 10 working days of breathing space from creditors to secure a potential rescue deal.
Bosses said funding had been agreed so shops can stay open and trading during this period.
Poundland’s owner, Gordon Brothers, has faced mounting political pressure to protect the chain’s future and MPs have accused them of deliberately cutting off funds and pushing it to the brink of insolvency.
Prime Minister Andy Burnham has stepped in to call for executives to work with the Government to find a solution that saves shops and jobs.
About 11,000 jobs and 600 shops in the UK remain at risk.
Poundland’s board said: “Amid an ongoing sale process, and with funding agreed to enable the business to continue trading during this period, the board of Poundland has today resolved to make an application for a second NOI with a view to identifying the best available prospects for shareholders, creditors and our people.
“This extends the current protections over the business for a further 10 working days.
“Our stores remain open as usual during this period and we thank our colleagues, suppliers and customers for their incredible and continued support.”
Poundland’s bosses held a private meeting with Parliament’s business committee on Wednesday.
Its chair, Liam Byrne, said Gordon Brothers had “taken millions of pounds out of Poundland when the business was on a knife edge” and there were “concerning signs it’s been strangled of access to its own funds”.
Gordon Brothers bought Poundland for £1 last year and launched a sale process for the company at the start of September.
It said the retailer was “challenged and vulnerable” despite efforts to turn around its performance and provide fresh funding.
Advisers have been in talks with parties interested in buying the brand or parts of the business such as swathes of shops.
It has held talks with potential bidders including Tesco over proposals to buy up to 150 stores, and other chains such as Iceland and Lidl.
Investment firm Xyra Holdings has emerged as a potential buyer for the whole business, while Irish firm Martin Property Group is believed to remain interested.
Gordon Brothers previously rejected a takeover offer from Martin Property Group but management named the firm as the preferred bidder last month.
If a rescue deal is not secured, then it is expected that administrators would be appointed, with corporate advisory firm AlixPartners understood to be lined up.