Woolworths in rescue talksAiling retailer in talks to sell 800 stores for £1
26 November 2008
Woolworths' shares have been suspended as talks continue over plans to rescue the business.
The ailing retailer - which scored poorly for customer satisfaction in our Which? annual - said it was in discussions over the potential sale of its retail outlets and stake in the 2 Entertain publishing business.
But Woolworths added that both deals were subject to the approval of its banks and said 'there can no assurance' that the sales would be completed.
Woolworths' crisis talks come as reports suggested furniture company MFI was also in danger of going into administration.
MFI - which has been hit by the housing downturn - employs more than 1,000 people and runs 110 stores across the UK.
Both retailers are victims of the wider economic downturn. Consumers feeling the pinch can find helpful information in our coping with the credit crunch guide.
Woolworths share suspension
Woolworths requested a suspension of the trading of its shares on the London Stock Exchange, pending the outcome of rescue talks and the resulting impact current speculation is having on the company's financial position.
The retailer has seen shares crash 90% over the past year to stand at just 1.35p as fears over the business grow.
Woolies' net debt stood at £294.5m at the beginning of August after a six-month trading period in which it made pre-tax losses of £99.7 million.
Woolies for sale
Woolworths, which has around 800 outlets, confirmed that BBC Worldwide was the potential buyer of its stake in 2 Entertain.
Restructuring specialist Hilco is said to have made an approach to buy the retail side of the business for a nominal £1 and assume a large share of Woolworths' debt.
Hilco is well known in UK retail circles after buying fashion chain MK One this year and subsequently placing it into administration.
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