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M2 deal to buy Wilko & save jobs falls through
The private equity firm M2 Capital has failed to provide 'proof of funding' for its £90m bid for the high street store chain Wilko in time. This paperwork verifies whether an individual or the organisation has the capital necessary to complete the purchase. It's required to help the administrator to put forward a viable plan of action to creditors. This means the process of making redundancies at the retailer will now resume. It is also understood that HMV owner Doug Putman, is still in talks with PwC, who is overseeing the sale of Wilko. Currently, it looks like we are now seeing the final days of yet another well known British retail chain on our high streets. Wilko was founded in Leicester when JK Wilkinson opened his 1st store in 1930. It expanded across the Midlands initially and by the 1990s it had became 1 of Britain's fastest growing retailers. This once successfull business has already seen the administrator announcing that it intends to close 14 branches. Administrators at PwC have said that 269 jobs at the chain's support centre in Worksop, and 14 others from a subsidiary firm of Wilko will now be cut at the close of business, on Monday, 4 September 2023. Further redundancies at its 2 distribution centres in Worksop and Newport are to begin from early next week, but numbers have not been confirmed. They have also announced the closing stores are:- Bournemouth; Stockton; The Fort Birmingham; Shipley; Scunthorpe; Narborough Road, Leicester; Grantham; Redditch; Rotherham; Skegness; Llanelli; Merthyr Tydfil; Cleethorpes; Woolwich. It is now unknown what will happen to the rest of the 400 stores now, in addition to its Head Office. If you are now aware of the administration process, an appointment Administrator has 8 weeks to write a statement explaining what they plan to do. If they can not see a way to rescue the business they will look at winding up. This will allow them to try to pay as much of the company's debts as possible by selling its assets off and using the proceeds to pay back the company's creditors. If it thinks a deal can be made to save the firm, the administrator has 12 months to attempt any rescue, though this can be extended with agreement from the creditors, or permission from the Court. In this case the administrator appears to have chosen to windup the firm as quickly as possible, as currently no viable options are on the table, as the 8 week limit looms ever closer. All hopes of saving this store chain are now on a possible deal being struck by Doug Putman. What are your thoughts about the potential loss of this well known high street retailer? Are you affected by this collapse of this iconic store chain? Please leave your views below.
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