Poundland suitor urges Gordon Brothers to release funding to secure sale

The leading solvent bidder for Poundland is urging its owner to immediately release tens of millions of pounds of funding needed to restock the discount retailer's shelves and save more than 10,000 jobs.

Sky News has learnt that Martin Property Group, which has seen two previous offers for Poundland rejected over Gordon Brothers' financial demands, told the chain's advisers on Friday that it remains keen to acquire it as a going concern.

Sources said the Northern Irish-based company had written to Alvarez & Marsal (A&M) and AlixPartners to ask Gordon Brothers to provide Poundland's management with access to funding needed to replenish its shelves and pay suppliers during the crucial pre-Christmas trading period.

Industry sources estimate that Poundland has well over £20m in cash on its balance sheet but say its management has not been permitted to access it to place new stock orders since a notice of intention to appoint administrators expires on Thursday.

While the notice could be extended, the current timetable means that Poundland could have just four days before it collapses into insolvency proceedings.

Such a development would exacerbate the political firestorm which has erupted over Gordon Brothers' stewardship of the company, which it bought for just one euro less than 18 months ago.

The company's current inability to place orders with suppliers threatens to derail any solvent deal unless the situation is addressed imminently, according to insiders.

However, industry sources said suppliers had been paid in full until the point at which the administration notice had been filed, meaning that Gordon Brothers could choose to use the cash within the business to normalise stock levels.

Sky News previously reported that Gordon Brothers had accused Poundland's management of breaching the terms of its asset-based lending facility, resulting in it cutting off access to both that and the company's bank account.

Martin Property Group has emerged as the only fully financed credible bidder for Poundland since an auction kicked off in September, although others - including Xyra Group Holdings, a little-known London-based entity - have been seeking financing to pursue rival offers.

Gordon Brothers - which Sky News revealed this weekend had received more than £18m in fees and charges from Poundland during its brief ownership - has said little publicly about the escalating crisis.

However, it has claimed that its aim is "to protect as many jobs as possible and preserve value in order to deliver the best available outcome for the people, creditors and local communities who care about this business as much as we do".

One financier who examined a bid and walked away from the process said Gordon Brothers' statement was at odds with the events of recent weeks.

"It's clear that if Gordon Brothers' statement is genuine, they would need to release funding in the next couple of days if the business is to stand a chance of survival," they said.

The chances of a solvent sale have been hampered by Gordon Brothers' demand for full and immediate repayment of a £30m shareholder loan for which it paid just £1 last year.

Of that sum, £22.5m is owed to the US-based investment firm, with the remaining £7.5m owed to Pepco Group, which sold Poundland to Gordon Brothers last year.

Pepco, which also retained a minority stake in the British chain, has offered to defer its right to repayment in the event of a solvent deal.

A trio of heavyweight directors resigned from Poundland's board last month in protest at Gordon Brothers' apparent orchestration of a move to force the retailer into administration.

If a solvent deal cannot be struck, thousands of high street jobs are likely to be lost as other retailers cherry-pick packages of stores out of the insolvency process.

Martin Property Group is understood to believe that normalising Poundland's stock levels after the current hiatus would take several weeks, and that it would also have to deal with wary suppliers who now want to change payment terms for their products.

One major Poundland supplier said they had been told that Martin Property Group had expressed a willingness to work with the supplier base to reassure them of its long-term commitment to the business.

The Londonderry-based bidder has pledged to retain all of Poundland's stores and staff, as well as a warehouse in Andy Burnham's Makerfield constituency.

On Wednesday, Gordon Brothers' European chief Mark Newton-Jones will meet MPs on the business and trade select committee, which has agreed to hold the session in private after being given assurances that the current owner wants to salvage Poundland's future.

MPs are expected to press Mr Newton-Jones on whether his employer has agreed to release the necessary funds to provide time for a solvent deal to take place.

In its capacity as administrator-in-waiting, AlixPartners has requested proposals from potential liquidators of Poundland's stores and stock in the event that a going concern deal cannot be secured.

This would earn millions of pounds more in fees for whichever firm was appointed as liquidator - with Gordon Brothers expected to be in the frame for the role unless it decided to recuse itself amid the intense acrimony over its ownership.

Martin Property Group could not be reached for comment on Sunday morning, while Poundland and Gordon Brothers have been contacted for comment.

(c) Sky News 2026: Poundland suitor urges Gordon Brothers to release funding to secure sale