Administrators PriceWaterhouseCoopers (PwC) announced on Monday that it completed a sale of McColl’s Retail Group plc to Alliance Property Holdings Limited, part of the Bradford-based Morrisons Group, the group’s largest supplier.
Morrisons won a battle against the owners of rival Asda for control of McColl’s.
EG Group, the petrol station and food retail business owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital, was set to win control of McColls after its lenders rejected a rescue deal from Morrisons on Friday.
The brothers and TDR also own Asda.
However, over the weekend, Morrisons came back with a fresh proposal.
“The deal successfully transfers all 16,000 staff, 1,100 shops across the UK and also includes Morrisons agreeing to rescue the group’s two pension schemes which have more than 2,000 members,” said PwC.
“McColl’s Retail Group plc, together with its subsidiary entities, operates a chain of more than 1,100 convenience retail stores and newsagents across the UK …
“The majority of group stores trade under the McColl’s brand, alongside 270 operating as Morrisons Daily concessions under an agreement with Wm Morrison Supermarkets Limited.
“The group had faced financial pressure over recent years resulting from Covid-19 related disruption and, most recently, supply chain challenges, creating issues in product availability.
“Mixed trading impacted the group in March and April 2022.
“While a recovery in trading performance had continued during the first half of March, the business experienced softer trading through the Easter period, impacted by reduced consumer spending and continued supply chain disruption across the industry.
“Throughout the period the group continued discussions with its key stakeholders, with a view to agreeing a new funding deal for the business to continue as a going concern.
“However these discussions did not result in an option which could be delivered in the time available, nor one that would have generated the best outcome for the creditors as a whole.”
Morrisons CEO David Potts said: “Although we are disappointed that the business was put into administration, we believe this is a good outcome for McColl’s and all its stakeholders.
“This transaction offers stability and continuity for the McColl’s business and, in particular, a better outcome for its colleagues and pensioners.”
Rob Lewis, joint administrator and partner, PwC, said: “Especially during the current economic climate, the completion of this transaction provides much needed certainty to McColl’s 16,000 staff after a period of understandable concern following the group’s challenges over the past months.
“As well as saving thousands of jobs, this deal secures a platform for the trustees of the group’s pension schemes to enter into arrangements which will protect the pensions entitlements of so many people.
“All in all a really positive outcome.
“Morrisons Wholesale Supply Agreement will continue in place after the transaction minimising disruption to customers and employees as all stores will continue to trade.
“We wish Morrisons well with integrating McColls into their business.”
Rachael Wilkinson, joint administrator and director, PwC added: “Having successfully secured this deal our role will now prioritise continuity of data and key systems alongside liaising with landlords and other key creditors.
“The transaction also includes an obligation on Alliance Property Holdings to rescue the company’s pension schemes, with Wm Morrison Supermarkets Limited acting as guarantor going forward.”