Poundland’s owner has said it is “taking due care” to consider if one of three bidders had enough funds to ensure its survival after the troubled budget retail chain secured two more weeks to find a deal.
The management of Poundland, which employs approximately ۱۲,۰۰۰ people and operates ۶۰۰ stores in the UK and Ireland, won approval from the high court for an extension of legal protection from creditors on Thursday morning.
Poundland’s board said it had sought the extra time “with a view to identifying the best available prospects for shareholders, creditors and our people”.
In a statement it said: “Our stores remain open as usual during this period and we thank our colleagues, suppliers and customers for their incredible and continued support.”
The retail chain’s US owner, Gordon Brothers, has been under pressure to accept a bid for the company that would save retail jobs and protect thousands of suppliers since Poundland filed a notice of intention to appoint administrators two weeks ago.
A spokesperson for Gordon Brothers said on Thursday: “We support the board’s decision to extend the legal moratorium over the company by a further ۱۰ working days. This brings additional stability amid an ongoing sale process in the backdrop of increasing cost pressures and a difficult inflationary economic environment.
“With this decision, we are today able to confirm to Poundland employees that funds will be released to allow payroll to be made in full this month, while additional funds continue to be released to support Poundland’s ongoing trading.
“We are in discussions with three parties for a sale of the whole business, and we have also received several offers from established high street retailers for significant parts of the business.
“While our preference remains a sale of the whole company, we are taking due care to ensure that any successful offer can provide the funds required to acquire the business and see it through to sustainable cash generation. We, the board, and all involved are working to secure a credible plan that delivers certainty, preserves value and protects as many jobs as possible.”
Gordon Brothers confirmed it had provided £۸۵m of financing, understood to be via an asset-backed loan that Poundland has only partially used over the past year.
That financing is in addition to a £۳۰m shareholder loan largely taken on by Gordon Brothers when it bought the business for a nominal £۱ last year.
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Gordon Brothers fought back after MPs on Wednesday accused the Poundland owner of extracting millions of pounds from the retailer when it was on a “knife-edge”.
Documents provided to MPs showed that the finance firm had taken close to £۲۰m in interest payments and various fees, including those relating to store closures since acquiring Poundland.
The US investment firm said it had provided finance for Poundland “when no one else was willing to finance the company – and has contributed substantial efforts to support a turnaround.
“Had we not, the company would have collapsed into insolvency in August ۲۰۲۵. Our efforts have continuously focused on the company’s value and its people, not prioritising one over the other,” it said.
