A lot of retail jobs are at risk as the owner of Poundworld is preparing to appoint administrators once it is not able to secure a last-ditch sale.
Reporters understand that TPG is aiming to buy time in order to push through on a deal with the company that is behind Little Chef, Rcapital, either via a pre-pack administration or a solvent sale.
The future seems to be gloomy for the 5,300-strong workforce of Poundworld as any solvent sale would initiate a painful restructure that will result to 100 store closures and thousands of job cuts.
It is understood that TPG is planning to secure the breathing space by submitting a notice of intention to appoint administrators today. The said process would give the company 10 working days to secure a deal by protecting Poundworld from its creditors.
Sky News first reported the emergence of Rcapital. It comes after Alteri Investors, the previous suitor, pulled out of the sale process that is led by Deloitte.
It is believed that Deloitte would be recruited in to manage the administration process.
Chris Edwards, the founder of Poundworld, is said to be interested in taking over the business, while Flacks Group, a US investment company, also wants to strike a deal.
TPG is based in the United States. It had been trying to rescue Poundworld from its looming financial position by seeking a company voluntary agreement (CVA), before coming up with a decision to sell.
Poundworld, which is based in West Yorkshire also owns the Bargain Buys brand. It is among a series of retailers that have been looking for lifelines amidst a more difficult trading on the high street.
Today, House of Fraser announced its plans to close 31 of its 59 sites via a CVA, placing 6,000 jobs at risk.
Meanwhile, Carpetright, New Look, and Mothercare have already secured CVAs, which enables the companies to close down underperforming stores and be granted large discounts on rents.
TPG, Deloitte, and Poundworld did not issue a comment regarding the matter.