Just yesterday we had reported that in its move to stave off a collapse, Toys R Us had proposed a rescue plan.
Now, it has come to light that after creditors backed the rescue plan, the UK retailer has come out successful.
The retailer’s creditors met yesterday to vote on the rescue plan, which hinged on a resolution of the pension deficit. Toys R Us’s UK staff pension scheme has a deficit of more than £25m.
The PPF said the new offer from the company was composed of a payment of £3.8m in 2018, with a further £6m promised over 2019 and 2020.
The vote saw 98% of Toys R Us creditors backing the arrangement.
The move follows last-minute negotiations with the Pension Protection Fund (PPF) to secure a £9.8m injection into the company’s pension fund.
However, the rescue plan entails closing 26 of its 105 UK outlets putting 800 jobs at risk although no stores will close until spring 2018. Toys R Us employs 3,200 staff in total in the UK.
Toys R Us will continue to trade under its company voluntary arrangement (CVA), which is a step short of going into administration.
Steve Knights, managing director of Toys R Us UK, said: “The vote in favour of the CVA represents strong support for our business plan and provides us with the platform we need to transform our business so that we can better serve our customers today and long into the future.”
“All of our stores across the UK will remain open for business as normal until spring 2018. Customers can continue to shop online and there will be no changes to our returns policies or gift cards across this period,” he added.
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