Post by The Collector on Nov 26, 2008 21:38:32 GMT
Exclusive: Woolworths to go into administration
The Woolworths board will meet in the next few hours to appoint Deloitte as administrator – after a last-ditch attempt by the Government to avert collapse failed.
By Richard Fletcher
Last Updated: 7:22PM GMT 26 Nov 2008
Trading in Woolworths shares was suspended as talks to rescue the beleaguered retailer continued. Trading in Woolworths shares was suspended this morning as talks to rescue the beleaguered retailer continued.
But following the breakdown of the talks the board plans to place the group's retail arm and distribution business into administration. However the holding company and 2entertain - a joint venture with the BBC - will not be placed into administration.
Neville Kahn a partner at Deloitte is expected to lead the administration.
In a brief Stock Exchange statement Woolworths announced this morning that it had asked the exchange to suspend trading "pending the outcome of these discussions".
Talks to save beleaguered retailer Woolworths, which employs almost 30,000 staff, broke up after 3am last night. They resumed this morning but broke down this afternoon.
The board of Woolworths had tried to persuade its lenders to back a restructuring plan that would have seen its loss-making retail chain sold to restructuring specialists Hilco and its stake in DVD publisher 2entertain sold to BBC Worldwide, its partner in the joint venture.
BBC Worldwide is understood to have bid in the region of £110m for 2entertain, which publishes DVDs including Blue Planet.
The deal with Hilco would have seen the restructuring specialist buy Woolworths retail chain for a nominal £1 but take on around £260m worth of Woolworths' debt alongside the stores.
EUK, Woolworths distribution business, would have remained in the ongoing Woolworths group along with around £120m of debt. Although best known for its retail business, EUK – alongside 2entertain – generates the majority of Woolworths' profits.
The collapse was sparked after a syndicate of the retailer's lenders - led by Bank of Ireland subsidiary Burdale Financial and GMAC Commercial – refused to sign up to the deal.
The syndicate - which also includes Barclays – lent Woolworths £385m in January secured against stock and other assets.
The collapse of Woolworths could spark further discounting as administrators try to clear stock in the run up to Christmas - hitting the profitability of other retailers.
[glow=red,2,300]Sad news, but somehow Woolworths have not been what they were for years...hope something will be done[/glow]
The Woolworths board will meet in the next few hours to appoint Deloitte as administrator – after a last-ditch attempt by the Government to avert collapse failed.
By Richard Fletcher
Last Updated: 7:22PM GMT 26 Nov 2008
Trading in Woolworths shares was suspended as talks to rescue the beleaguered retailer continued. Trading in Woolworths shares was suspended this morning as talks to rescue the beleaguered retailer continued.
But following the breakdown of the talks the board plans to place the group's retail arm and distribution business into administration. However the holding company and 2entertain - a joint venture with the BBC - will not be placed into administration.
Neville Kahn a partner at Deloitte is expected to lead the administration.
In a brief Stock Exchange statement Woolworths announced this morning that it had asked the exchange to suspend trading "pending the outcome of these discussions".
Talks to save beleaguered retailer Woolworths, which employs almost 30,000 staff, broke up after 3am last night. They resumed this morning but broke down this afternoon.
The board of Woolworths had tried to persuade its lenders to back a restructuring plan that would have seen its loss-making retail chain sold to restructuring specialists Hilco and its stake in DVD publisher 2entertain sold to BBC Worldwide, its partner in the joint venture.
BBC Worldwide is understood to have bid in the region of £110m for 2entertain, which publishes DVDs including Blue Planet.
The deal with Hilco would have seen the restructuring specialist buy Woolworths retail chain for a nominal £1 but take on around £260m worth of Woolworths' debt alongside the stores.
EUK, Woolworths distribution business, would have remained in the ongoing Woolworths group along with around £120m of debt. Although best known for its retail business, EUK – alongside 2entertain – generates the majority of Woolworths' profits.
The collapse was sparked after a syndicate of the retailer's lenders - led by Bank of Ireland subsidiary Burdale Financial and GMAC Commercial – refused to sign up to the deal.
The syndicate - which also includes Barclays – lent Woolworths £385m in January secured against stock and other assets.
The collapse of Woolworths could spark further discounting as administrators try to clear stock in the run up to Christmas - hitting the profitability of other retailers.
[glow=red,2,300]Sad news, but somehow Woolworths have not been what they were for years...hope something will be done[/glow]