Companies owed money following the collapse of own account operator Poundworld Retail may only receive a tiny fraction of the estimated £204m owed to them, after the administrator said there was just £600,000 available to distribute.
In a progress report from Deloitte marking a year since negotiations with potential buyer R Capital ground to a halt, the administrator said secured creditor Santander would not be paid in full either.
In addition, second lien secured creditor, Titan Atlas Holdings, would not be repaid any of the £19.8m it is owed in respect of capital introduced into the beleaguered business in February 2018.
The retailer had a fleet of 75 vehicles and 140 trailers and delivered to 335 stores, but it struggled against the falling value of sterling, weak consumer confidence and rising competition in the discount retail sector.
Despite an accelerated merger and acquisition process that led to a number of expressions of interest from both trade and financial businesses, no offers were received that were at an acceptable level of value to the secured lender.
The report said that Poundworld Retail’s employees arrears of wages and salaries have been paid in full and amounts owed for outstanding holiday pay and unpaid pension contributions should be settled in full too.
It added: “At the date of our appointment, HM Revenue & Customs were in the process of conducting an enquiry into the company’s alleged pre-appointment underpayment of the national minimum wage relating to certain store employees.
“The administrators continue to assist HMRC with these enquiries.”
In May 2019, the original owners of Poundworld, who funded the brand before selling it on in 2014, applied for a licence to run 10 HGVs and six trailers for a new discount chain called One Below. The OTC granted the licence in July.
