On the go: A crucial vote takes place today on a rescue package for Sir Philip Green’s beleaguered Arcadia Group.
According to Sky News, the company could collapse as early as this evening if its plans for 50 store closures and rent cuts elsewhere are rejected, with 18,000 jobs at risk.
Arcadia Group – the company with such famous brands such as Topshop, Dorothy Perkins and Burton – needs the backing of at least 75 per cent of creditors, in a series of ballots that were delayed from last week due landlords’ objections.
In a modified insolvency arrangement put forward last Friday, the group is seeking a reduction in rental costs of between 25 per cent to 50 per cent across 194 locations out of the group’s 566 UK and Irish trading locations over a three-year period across the seven company voluntary arrangements.
In the first year, the initial cost is expected to be approximately £9.5m.
The Pensions Regulator and the Pension Protection Fund, one of the largest creditors, have approved the amendments made with the landlords to the CVA. Following this, the PPF has now signed a new proxy supporting the CVA vote today, but the outcome of today’s vote is on a knife edge.
A spokesman for the PPF said last week: “We recognise that this continues to be a worrying time for members of the Arcadia pension schemes and they can be reassured that the PPF is here to protect them whatever the outcome of the CVA vote.”
The Arcadia Pension Fund’s most recent 2018 fund update showed an aggregate solvency deficit of £727m with combined technical provisions deficits at an estimated £537m.
