Toys R Us future rocked further by PPF
Pension Protection Fund demands £9m pension scheme injection or toy retailer risks losing CVA greenlight
Toys R Us' shaky future looks even less stable after being told it must come up with £9m for its Pension Protection Fund or face losing the required votes to go ahead with restructuring plans.
The money, which is around the same amount it would normally pump into its pensions scheme over the next three years, must be found in order to push ahead with the toy retailer's proposed company voluntary agreement (CVA). The CVA allows the UK arm of Toys R Us to restructure its finances, but without the PPF's vote, the plan would be scuppered.
The vote takes place on Thursday, with Toys R Us needing 75 per cent of its creditors to vote in support of the CVA for it to pass.
If the CVA is voted through it will still mean closure for at least 26 of the toy chain's shops from next spring and the loss of as many as 800 jobs. But this number could rise to as many as 3,200 jobs on the chopping block should the arrangement not go through.
Malcolm Weir, Director of Restructuring and Insolvency at the PPF, said: "The pension scheme is already underfunded and, if we were to vote in favour of the CVA, we would need actions taken that ensure the position of the pension scheme was not going to further weaken."
He added that protection of all employees pensions was of paramount importance, and that they would be covered regardless of the CVA outcome.
Toys R Us has said there will be no disruption for shoppers through the Christmas and New Year period.