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Woolworths shares have been suspended for the second time in a week, as the group continued to explore the sale of its distribution business. With insolvency looming, Woolworths might also struggle to pay staff at the end of the week, reports the Times.
Sources told the newspaper that administration was the most likely option "as the retailer scrabbles to find sufficient funds to pay its monthly wage bill, despite an agreed side deal to sell 2 entertain, its music and film distribution business". Woolworths has agreed in principal to sell 2 entertain to BBC Worldwide, its joint venture partner, for £100m in a bid to cut its debt.
However, the deal must go ahead together with a rescue deal to sell its 840-store high street business to Hilco, the distressed-business fund, or not at all because lenders must agree the whole package.
The FSA suspended Woolworths shares this morning, pending an announcement from the company, which had earlier confirmed it was in discussion with BBC Worldwide about a possible sale of 2 entertain.
The company said in a statement: "Whilst discussions in relation to such sales are being pursued with vigour, terms have not yet been agreed. Both sales are subject, amongst other things, to the approval of the Group's lending banks. Accordingly, there can be no assurance that a sale of the Group's retail business or of its interest in 2 Entertain will be concluded."