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(Alliance News) - McColl's Retail Group PLC said Friday it has been left with "no choice" but to be placed into administration, after the failure of financing talks with lenders.
Shares in the company were suspended from trading shortly after 1230 BST on Friday, at the company's request. The stock was last quoted 45% higher at 1.66 pence.
This latest development follows a Sky News report earlier on Friday that said McColl's partner Wm Morrison Supermarkets had proposed a rescue deal on Thursday, to prevent the convenience store operator from falling into insolvency.
"Whilst the constructive discussions with the company's key wholesale supplier to find a solution with them to the company's funding issues and create a stable platform going forward had made significant progress, the lenders made clear that they were not satisfied that such discussions would reach an outcome acceptable to them," the Brentwood, Essex-based convenience store chain explained on Friday.
McColl's lenders now have declined to further extend the waiver of the company's banking covenants.
McColl's has appointed PriceWaterhouseCoopers as administrators, expecting that the firm will sell the business to a third-party purchaser "as soon as possible". The application is expected to be approved at court over the course of Friday, McColl's said.
McColl's on Thursday said it was in discussions regarding potential financing solutions for the business to resolve short term funding issues. Should an outcome not be agreed, it cautioned it was "increasingly likely" that the business will be placed into administration.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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