Coming up

Don't miss




Politics: parties under pressure

Read more


Inside the CIA’s secret prisons

Read more


In Burma, the rise of radical Buddhism

Read more


Haute Couture: the hand-stitched clothing made in Paris that sells for the price of small yachts

Read more


'Caution, another Cast Lead lies ahead'

Read more


Rising into the ranks of Haute Couture

Read more


Gaza: How to Stop the Spiral? Israel Readies For Ground Offensive

Read more


Gaza: How to Stop the Spiral? Israel Readies For Ground Offensive (part 2)

Read more


A thin line between fact-checking and propaganda in Gaza social media coverage

Read more

  • Inside the CIA’s secret prisons

    Read more

  • Are French high school students getting smarter?

    Read more

  • Disgraced Suarez leaves Liverpool for Barcelona

    Read more

  • French ‘Civic Service’ eyes massive expansion amid huge demand

    Read more

  • Kurdish forces take over two oilfields in northern Iraq

    Read more

  • Amazon snubs French free delivery ban with one-cent charge

    Read more

  • In Pictures: Petrol station hit by Hamas rockets

    Read more

  • Manhunt as FIFA partner flees Rio hotel to avoid arrest

    Read more

  • Video: Living in Tel Aviv, under threat of rocket attack

    Read more

  • Video: Palestinians fear full Israeli military offensive in Gaza

    Read more

  • US prepared to negotiate Gaza ceasefire, Obama says

    Read more

  • French companies will have to accept anonymous CVs

    Read more

  • Ukrainian forces close in on Donetsk

    Read more

  • Germany asks US intelligence station chief to leave country

    Read more

  • Tour de France passes WWI Chemin des Dames battlefield

    Read more

Woolworths shares suspended as crisis talks continue



Latest update : 2008-11-26

Shares in UK high street retailer Woolworths have been suspended as the company continues talks to save it from collapse. The group has been hit hard by the recent downturn in consumer spending.

Trading in shares of Woolworths Group Plc, the struggling British retailer, were suspended on Wednesday, while talks continued to save the business from collapse.

The 99-year-old group, which still sells more sweets than any other British retailer and has top five positions in toys, children's clothing, homewares and entertainment products, confirmed that it remains in discussions regarding the potential sale of its 800-store retail business to restructuring specialist Hilco UK for a nominal sum.

Woolworths said it was also in talks with the BBC regarding the possible sale of its 40 percent interest in the 2 Entertain DVD publishing joint venture with BBC Worldwide, the broadcaster's commercial arm.

"Whilst discussions in relation to such sales are being pursued with vigour terms have not yet been agreed," the group said in a statement.

"Both sales are subject, amongst other things to the approval of the group's lending banks (Bank of Ireland division Burdale and GMAC). 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."

Woolworths added that pending the outcome of the talks and the consequent impact on the company's financial position it had requested a suspension in the trading of its shares.

A spokeswoman for Woolworths declined to comment further.

However, an executive familiar with the discussions said the BBC has agreed in principle to pay "more than 100 million pounds" ($153.8 million) for Woolworths' 2 Entertain stake.

Woolworths' pension fund is entitled to the first 50 million pounds of any 2 Entertain disposal deal under an agreement struck between the trustees and the Woolworths board when Burdale and GMAC lent the group 385 million pounds in January.

As of Aug. 2 the pension fund had a deficit of 58.2 million pounds.

The sale of both the retail business and the 2 Entertain holding would leave Woolworths with only a profitable entertainment wholesale distribution business.

Hilco's proposal would see it buy Woolworths' retail division for 1 pound and take on about 300 million pounds of the group debt. The balance of the debt would be assumed by the rump business.

If the lenders decide not to approve the sales, analysts expect Woolworths' board will place the entire group into administration, threatening the jobs of 30,000 employees.

Ardeshir Naghshineh, Woolworths' largest shareholder with a 10.2 percent stake, said on Monday the retailer should not be forced into administration but should continue as a going concern.

He outlined a plan to the lenders which would see Woolworths realising some of its assets through the sale of leases to bring in cash.

A spokesman for Naghshineh declined to comment.

Woolworths shares were suspended at 1.22 pence, valuing the equity at just 18 million pounds.

The group, which demerged from Kingfisher in 2001, has been struggling for years in the face of growing competition from supermarkets, online retailers and specialist players.

Its problems have been exacerbated in recent months by a rapid downturn in consumer spending, which has forced a string of retailers, including furniture groups MFI and ScS Upholstery, into administration, a form of creditor protection.

In September, Woolworths posted a record first-half underlying pretax loss of 90.8 million pounds on turnover of 1.1 billion pounds and scrapped its dividend.

A spokeswoman for the BBC confirmed that talks with Woolworths regarding 2 Entertain were ongoing and stressed that any deal with BBC Worldwide would not involve licence fee payers money.

Date created : 2008-11-26