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26/11/2008
Woolworth Worthless?
Despite the festive shopping season being well underway, troubled retailer Woolworths has today seen dealing in its shares suspended as the firm continues talks to rescue the business.
Woolworths said in a statement that it was in discussions over the potential sale of its 840 stores.
The firm added that it was also in talks to sell its 40% stake in publisher '2 Entertain' to the BBC Worldwide concern, which already owns the other 60%.
However, neither deal can go ahead without the backing of its banks, and "there can be no assurance" they would be completed, Woolworth management commented.
A specialist restructuring firm, Hilco has offered to buy the chain of shops for just £1, but so far cannot reach agreement on how much of Woolworth's £385 million debt it will take on.
But time is running out, as without some form of a deal, analysts say Woolworths faces the real risk of going into administration.
Shares in Woolworths have fallen by more than 90% over the past year as concerns over its future have risen.
In September, the firm reported a record first-half pre-tax loss of £90.8m and scrapped its dividend to shareholders.
However, just a few months ago, in August, it rejected a takeover bid of £50m for its 815 stores from a group headed by the founder of the Iceland frozen food chain, Malcolm Walker.
In addition to the Woolworths stores and its 40% stake in 2 Entertain, the company runs distribution business Entertainment UK.
(BMcC/KMcA)
Woolworths said in a statement that it was in discussions over the potential sale of its 840 stores.
The firm added that it was also in talks to sell its 40% stake in publisher '2 Entertain' to the BBC Worldwide concern, which already owns the other 60%.
However, neither deal can go ahead without the backing of its banks, and "there can be no assurance" they would be completed, Woolworth management commented.
A specialist restructuring firm, Hilco has offered to buy the chain of shops for just £1, but so far cannot reach agreement on how much of Woolworth's £385 million debt it will take on.
But time is running out, as without some form of a deal, analysts say Woolworths faces the real risk of going into administration.
Shares in Woolworths have fallen by more than 90% over the past year as concerns over its future have risen.
In September, the firm reported a record first-half pre-tax loss of £90.8m and scrapped its dividend to shareholders.
However, just a few months ago, in August, it rejected a takeover bid of £50m for its 815 stores from a group headed by the founder of the Iceland frozen food chain, Malcolm Walker.
In addition to the Woolworths stores and its 40% stake in 2 Entertain, the company runs distribution business Entertainment UK.
(BMcC/KMcA)
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