Unsecured creditors to McColl’s are still owed about £45 million after the collapse of the British convenience store chain, states a new report citing new documents.
Morrisons bought McColl’s last year, beating the owners of Asda — the Issa brothers and TDR Capital, the private equity firm — to seal the deal.
The supermarket’s purchase of its convenience and wholesale partner amounted to £182.1 million, with a further sum of up to £8 million to pay unsecured creditors.
The administrators’ proposal report, published last week, revealed that unsecured creditors, including trade suppliers and landlords, are in line to receive dividends from the prescribed parts. According to documents filed at Companies House, secured creditors to McColl’s had been paid the full £164.3 million owed to them.
PwC, the administrator, has sought approval from creditors to extend the administration to May 8, 2024 as the standard 12-month administration period was not a “sufficient” amount of time to complete the restructuring, they said.
The deal left Morrisons with £6.6 billion of debt due to which it is being said that it had been unable to compete with rivals on the price of groceries.
Earlier this month, David Potts, chief executive of Morrisons, said that the supermarket group would have missed out to Asda, its rival, which had been convinced it had secured a deal, if it had still been in public ownership.
“We were cohesive and fast . . . to get McColl’s that weekend. We won. One-nil to Bradford,” Potts told The Times.
The biggest focus for the business now, he added, was converting the rest of the McColl’s stores to its Morrisons Daily fascia. The company has 600 out of 1,000 stores left to convert.
The McColl’s brand can trace its roots to 1901 when Robert Smyth McColl, a Scottish footballer, opened his first shop in Glasgow. In 2014 it was floated on the stock exchange with a valuation of £200 million, which had fallen to about £3.2 million by the time the company went into administration. As a standalone company McColl’s had annual sales of £1.2 billion, representing about 0.8 per cent of the grocery market in the UK.
