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Ailing high-street chain Wilko in 'rescue bid' talks with specialist investor Gordon Brothers
8 August 2023, 15:00 | Updated: 8 August 2023, 16:51
A rescue specialist investor is exploring a move to save Wilko as the struggling retailer teeters on the edge of collapse.
Gordon Brothers are in talks about a deal to rescue the high-street staple which announced that it had appointed administrators last week.
Sky News is reporting that a successful takeover bid will see Wilko "implement a restructuring that would involve significant numbers of store closures and job losses".
Gordon Brothers has approached other investors about the deal which could be structured as £20 million of equity and provide £50 million in debt financing.
The boss of the homeware and hardware chain said it is expected to enter insolvency after failing to secure a takeover to help the business with "mounting cash pressures".
There are 400 stores and 12,000 staff in the UK that face being closed down after Wilko indicated it was at risk of insolvency proceedings.
The chain has spent several weeks searching for a rescue deal but has now given notice of intention to appoint administrators.
Wilko chief executive Mark Jackson said: "While we can confirm we've had a significant level of interest, including indicative offers that we believe would meet all our financial criteria to recapitalise the business, at present we don't today have an offer that provides the necessary liquidity in the time we have available, given the mounting cash pressures we're faced with.
"Unfortunately, with this in mind, today we're having to take the difficult decision to file a notice of intention.
"We'll continue to progress discussions with interested parties with the aim of completing a transaction which preserves the business and will encourage those interested parties we're in discussions with to move as fast as possible.
"We continue to believe that our robust turnaround plan, with significant re-stabilisation cost savings in progress, will deliver a profitable Wilko and maximise the significant opportunities that we know exist."
The company was founded in 1930.