Poundland warned that it would run out of money in days today before a multimillion-pound rescue plan was approved by a judge.
Barristers representing the budget retailer told the High Court in London that it would run out of money by 7 September if the restructure was not approved.
Tom Smith KC, for Poundland Limited, said the retailer’s financial position had “significantly deteriorated during the last two years” and that if the restructure was not approved, the company’s directors would likely place it into administration by Friday.
Sir Alastair Norris, the judge, approved the rescue, saying: “I am going to sanction the plan. I will give my reasons later.”
Founded in Burton upon Trent, Staffordshire, in 1990, Poundland has around 14,700 staff members and 800 stores.
In June, it confirmed plans to shut 68 stores after being sold for a nominal fee.
What’s in the restructuring plan?
In court, Smith said: “The plan will release a further £60m of funding, and that is in addition to the £30m that has already gone in following the purchase that took place on June 12.
“So, in effect, if you add everything up, Gordon Brothers is putting in £90m.”
As well as the store closures, which would put around 1,000 jobs at risk, Poundland also said it would close its frozen and digital distribution site at Darton, South Yorkshire, later this year.
Another warehouse at Springvale in Bilston, West Midlands, would be closed early next year.
A further 350 people will be affected by the warehouse closures, which are linked to the company’s plan to stop online sales through its Poundland.co.uk website.
Smith said the company was currently due to pay back £276.5m in loans by 1 September, which would be pushed back by three years under the restructuring plan.
It would also see the company provided with a £30m overdraft facility and have some of its rents reduced.
