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 Â£9 million into its pension fund ahead of a crunch vote on rescue plans.
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.
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.