The billionaire Issa brothers have dropped plans to buy convenience store chain McColl’s.
The owners of Asda and EG Group withdrew last week, the London-listed retailer confirmed yesterday, narrowing its options as it seeks to find a buyer or investor to inject capital into the business.
McColl’s owns 1,100 shops across the UK, but after supply problems, a fall in sales and the collapse of its share price the business is only valued at £8m, less than its £12.6m pension deficit.
The convenience store chain has been working with advisers for months on a refinancing of the business and it had hoped to conclude discussions with its banks by the end of this month, when it publishes results.
However, McColl’s said yesterday that its results would be delayed until May to allow time for its talks with lenders to conclude. Its banks have already agreed to defer financial covenant tests on a rolling monthly basis. Six months ago the retailer raised £30m from shareholders to try to secure its future. McColl’s was floated in 2014 with a £200m valuation.
Morrisons is thought to be interested in parts of McColl’s, but restructuring sources said that a distressed sale, requiring an insolvency process, might be the most likely route rather than a full takeover.
