In the UK, Woolworth’s–which has been headed for bankruptcy over the past two months–is now perched right on the edge. “Unless a deal is agreed in the next few days the entire Woolworths group looks poised to collapse into administration – putting 30,000 jobs at risk,” the Sunday Times writes. They add, “City sources say that Woolworths is fast running out of cash amid torrid trading conditions on the high street. It is thought that the company only has sufficient funds to last until about the middle of next month.”
The banks hold the controlling cards in negotiations, according to the Observer, as secured creditors who are owed almost 400 million pounds. The plans that have been under negotiation most recently would have the parent company give away the Woolworth’s retail stores and much of their debt, leaving behind the profitable distribution companies (EUK and Bertram’s) along with other properties including a joint venture with the BBC. “Management is trying to broker a complex deal by which the retailer might enter administration without dragging its sister companies down with it,” the Observer writes. (Unclear, however, is what would happen to all the money that the Woolworth’s retail stores “owe” to the conglomerate’s distribution companies…)
Sunday Times
Guardian