Workers for the newsagent chain McColl's could be at risk of losing their jobs as the company is reportedly 'on the brink' of collapsing.
The convenience store chain, which has more than 1,300 stores in the UK, is said to be in emergency talks for new funding to help to keep the business running, reported The Mirror.
According to reports, the retailer has a matter of weeks to secure new funding amid fears that the business could collapse.
READ MORE: Asda set to give 103,000 of its workers up to £412 bonus for 'hard work' during covid
Around 200 of its stores trade under the Morrisons Daily brand – with the supermarket said to be keeping a close eye on its rescue talks.
EG Group, the petrol stations giant controlled by Asda owners Mohsin and Zuber Issa and the private equity firm TDR Capital, is said to have held discussions about making an offer for McColl's but decided against doing so last week.
The company, which is listed on the London Stock Exchange, employs about 16,000 people, or roughly 6,000 on a full-time equivalent basis.
It raised £30million from shareholders in a cash call just six months ago.
Wm Morrison, which agreed to a £7billion sale to the private equity firm Clayton Dubilier & Rice last year, is understood to be monitoring McColl's situation closely with a view to possibly acquiring hundreds of its stores out of insolvency.
But the supermarket it is not believed to be in active discussions about a complete takeover of the company.
In November, McColl's announced that it would expand the number of Morrisons Daily conversions from 350 to 450 within a year.
If McColl's fails to secure new funding and is forced into administration, it would be the largest retail collapse since the Edinburgh Woollen Mill Group in 2020 and Debenhams, which employed about 12,000 people, in that same year.
Retail industry sources said that McColl's shares were now effectively "worthless" and that a pre-pack administration or other forms of insolvency increasingly looked like the most likely outcome.
McColl's lenders are being advised by PricewaterhouseCoopers, while Stephens Europe, a corporate finance firm, is leading the search for additional capital.
Jonathan Miller, McColl's chief executive, said in December that the financial year had "undoubtedly been a tough year for the business, ending with the widely reported and ongoing supply chain challenges".
The retailer had already been struggling previous to the pandemic.
"Although we have been able to partly mitigate these external factors, they have still had a significant impact on underlying trading," he added.
Mr Miller is understood to have invested £3m personally in the fundraising last summer in a bid to save the business.
McColl's has been approached for comment.
Receive newsletters with the latest news, sport and what's on updates from the Liverpool ECHO by signing up here
