The fate of 3,200 Toys R Us jobs is hanging in the balance ahead of a crunch vote on the firm’s future, with the retailer facing collapse unless a rescue deal is agreed.
Creditors to the beleaguered retailer will on Thursday vote on the firm’s proposal for a company voluntary arrangement (CVA), a scheme that will allow it to jettison under-performing stores but keep the company afloat.
However, if it is rejected, then it is understood Toys R Us could collapse into administration on Friday, just days before Christmas.
Complicating matters is the Pension Protection Fund (PPF), which is also a creditor and has so far refused to back the retailer’s rescue plans unless Toys R Us agrees to pay £9m up front into its pension fund.
The PPF is demanding that Toys R Us makes the payment to secure three years’ worth of funding up front for its defined salary staff pension scheme, which has a shortfall of between £25m and £30m.
But it is believed Toys R Us does not have enough cash to meet the PPF demands.
The PPF’s voting intention means the CVA may not go ahead, as Toys R Us needs the backing of 75% of creditors.
The PPF’s proportion of the creditor vote accounts for 31%, effectively giving it the power to veto any deal.