(Reuters) – British supermarket group Morrisons has won a battle with the owners of rival Asda to buy convenience store chain McColl’s out of administration, Sky News reported on Monday. McColls, which runs 1,100 stores and employs 16,000, collapsed into administration, a form of protection from creditors, on Friday, with PricewaterhouseCoopers (PwC) named as administrator. […]
(Reuters) – British supermarket group Morrisons has won a battle with the owners of rival Asda to buy convenience store chain McColl’s out of administration, Sky News reported on Monday.
McColls, which runs 1,100 stores and employs 16,000, collapsed into administration, a form of protection from creditors, on Friday, with PricewaterhouseCoopers (PwC) named as administrator.
EG Group, the petrol station and food retail business owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital, had been set to seize control of McColls after its lenders rejected a rescue deal from Morrisons. The brothers and TDR also own Asda.
However, over the weekend Morrisons, which has a wholesale supply agreement with McColl’s, came back with another proposal that will see all of its stores and staff preserved, pension obligations honoured and lenders repaid in full.
Morrisons, McColl’s and EG Group all declined to comment.
McColl’s had been in talks with its lenders for weeks to try to resolve its funding woes. Its shareholders had seen the value of their investment virtually wiped out over the last year.
The retailer’s stock was suspended from trading on Friday.
(Reporting by Muhammed Husain in Bengaluru, Additional reporting by James Davey in London; Editing by Krishna Chandra Eluri)
