Poundland avoids administration after rescue plan approved
Poundland has avoided collapsing into administration after its restructuring plan was approved by the High Court.
Under the terms of the restructuring plan, £60m of funding will be released into the business, while £276.5m in loans – which Poundland is due to pay in September – will be pushed back by three years. The retailer will also be provided with a £30m overdraft facility and have some rents reduced at certain stores.
The budget retailer – which operates around 800 stores in the UK – said that it was at risk of running out of cash by 7th September if the plan was not approved.
Poundland has already announced that it will close 68 of its stores as part of the restructuring plan. This will see the retailer’s store estate shrink to around 650 to 700.
Following the High Court decision, Barry Williams, managing director of Poundland said it would “stabilise the business”.
He added that the focus would now focus on getting the retailer “back to growth”, by updating product ranges and lowering prices.
In June, Poundland was sold by Polish group Pepco to a subsidiary of private equity firm Gordon Brothers, for £1. This followed poor financial performances for the retailer, which reported a pre-tax loss of £35.7m in the last financial year.