UK supermarket major Morrisons proposes McColl's rescue deal - Sky News (updated)

MccollS Retail

06/05/2022 09:53

(Adds McColl's response, shares and background)
    May 6 (Reuters) - British supermarket major Morrisons has
proposed a rescue deal to help avert the collapse of McColl's
 MCLSM.L , Sky News reported on Friday, a day after the
convenience store chain warned of an increasing likelihood of
going into administration.
    McColl's shares slumped as much as 55% in early trade,
before reversing course to trade about 21% higher at 1.42 pence
on hopes of a lifeline. The stock had lost roughly 90% in value
this year, excluding the latest moves.
    The Sky News report said https://news.sky.com/story/morrisons-pitches-last-ditch-rescue-deal-for-ailing-convenience-retailer-mccolls-12606452
 the proposal from Morrisons, which has a wholesale tie-up with
McColl's, would see the former repaying the latter's lenders in
full and preserving the vast majority of its shops and jobs,
citing an insider and people familiar with the matter.
    Morrisons and McColl's declined to comment.
    Cash-strapped McColl's has been scrambling to get short-term
funding to stay afloat and wider challenges in the British
retail industry, including the recent cost-of-living crisis and
supply chain issues, have further challenged the sector.
    The company reiterated on Thursday it was still in talks
over potential financing to resolve the funding issues and
create a stable platform for the business.  urn:newsml:reuters.com:*:nL3N2WX2XK
    "Even if a successful outcome is achieved, it is likely to
result in little or no value being attributed to the Group's
ordinary shares," McColl's said on Thursday.  urn:newsml:reuters.com:*:nRSE5279Ka
    The 1,100-store-strong group runs McColl's and Morrisons
Daily branded convenience stores as well as Martin's newsagents
and employs about 16,000 people.  

 (Reporting by Pushkala Aripaka and Amna Karimi in Bengaluru and
James Davey in London; editing by Uttaresh.V and Rashmi Aich)
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+91 852 751 3793 ;))