Fears for Toys R Us as stand-off emerges

Fears are mounting over the future of embattled retailer Toys R Us amid a stand-off over demands for the chain to pay £9 million into its pension fund ahead of a crunch vote on rescue plans.

Tuesday, 19th December 2017, 3:39 pm
Updated Tuesday, 19th December 2017, 4:55 pm

Britain’s pension lifeboat – the Pension Protection Fund (PPF) – is demanding that Toys R Us makes the payment to secure three years’ worth of funding upfront for its defined salary staff pension scheme, which has a shortfall of between £25 million and £30 million.

It is understood the PPF will not back the retailer’s planned restructuring unless Toys R Us agrees to pay up the £9 million within two months, with a midday deadline looming large for proxy votes to be lodged ahead of Thursday’s creditors meeting.

But Toys R Us , which has a Preston branch, is not believed to have enough cash to meet the PPF demands.

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The PPF’s vote will determine whether the rescue plans go ahead and there are concerns that if the company voluntary agreement (CVA) fails, Toys R Us could collapse into administration, putting 3,200 at risk.

Toys R Us needs the backing of 75% of creditors, including landlords, for the CVA to go through.