Wilko ‘in need of £70m’ cash injection for rescue deal

Wilko will reportedly need any interested buyer to inject around £70 million as part of any rescue deal.

Last week, the discount retailer announced plans to appoint administrators at the High Court, giving it a 10-day window in which to try and secure a deal while being shielded from action by other creditors.

Wilko is being advised throughout the process by PricewaterhouseCoopers.

According to the Times, an unnamed rival discount chain and two private equity firms have displayed interest in buying Wilko out of administration, in a move that would also involve taking over the analysis process around cutting rent costs under a company voluntary arrangement (CVA) – a voluntary insolvency procedure – which Wilko entered in June.

Chief executive Mark Jackson told Sky News in June that plans for the CVA option were initiated in January and that it was being positioned as part of a strategic plan to “first stabilise the business” before implementing a growth strategy.

However, The Times said that any prospective buyer would have to invest £25 to £30 million into the company to ensure stock continues to move into Wilko’s stores.

The newspaper added that £40 million would be required to pay off a debt owed to Hilco – the retail investor which granted Wilko a £40 million credit facility in January to “shore up” its finances – although the restructuring firm is understood to be willing to continue lending to Wilko.

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