Convenience chain McColl’s has confirmed it will collapse in administration, putting 1,100 stores and 16,000 workers at risk.
The struggling retailer held talks with its lenders on Friday morning in hopes they could extend their loan agreements.
Supermarket giant Morrisons, which is a major wholesale partner, has also made a last ditch effort to bail out the business.
However, the company confirmed that “the lenders have made it clear that they are not confident that these discussions will lead to an outcome acceptable to them.”
He said the company would now appoint PwC directors with the aim of “safeguarding the future of the business and protecting the interests of employees”.
The company said it hoped the administrators would help “implement a sale of the business to a third-party acquirer as soon as possible.”
It is understood that Morrisons are still interested in a takeover, while Sky News has reported that forecourt giant EG Group is interested in a deal.
Earlier on Friday, Morrisons filed a bailout deal which would also take the business into operation, absorb its debts of more than £100million and take responsibility for the company’s pension scheme.
The two companies are major partners, with McColl’s operating hundreds of convenience stores under the Morrisons Daily brand.
McColl’s has struggled financially in recent years after witnessing soaring costs due to supply chain disruption, inflation and its heavy debt load.
On Thursday night, McColl’s said it was in talks on “potential financing solutions” to resolve its funding issues.
McColl’s shares were suspended earlier this week after the company delayed the release of its latest financial results due to funding talks.
A spokesperson for McColl’s pension trustee warned that staff could miss payments after administration and urged any new owners to protect the plans.
Said: “Pension plans are important stakeholders in the business, and the Trustees call on all potential bidders to make it clear that they will honor the pension promises made to the 2,000 members by McColl’s and its subsidiaries, and will not seek to break the link between the plans and the company.
The directors added: “Severing the link between the schemes and the sponsoring company, through a pre-pack administration, would represent a serious breach of the pension promises made to staff who have served the company loyally for many years. years, and risks causing schemes to enter the Pension Protection Fund with a consequent reduction in benefits.