Toys R Us on brink of administration
Complexity of deal sees buyers shy away from the troubled toy retailer as £15m VAT bill deadline closes tomorrow
Toys R Us UK could fall into administration tomorrow, Tuesday 27 February, when it's set to pay a substantial VAT bill it currently cannot afford.
The troubled toy chain owes £15m and is unlikely to make that payment without a buyer.
Sources told Sky News that the directors of Toys R Us' UK arm will likely appoint administrators tomorrow after a number of talks with potential buyers fell through because of the complexity of the deal. Major hurdles include the VAT repayment and a more than £9m investment obligation to the Pension Protection Fund, the toy retailer's biggest unsecured creditor.
Hilco Capital, which pulled HMV back from the bring in 2013, and Alteri Investors, a firm known for swooping on ailing retailers, have both apparently shied away from taking on the retailer and its debt.
Corporate recovery firm Moorfields is said to be considering handling the administration, which would put 3200 jobs on the line. But administration would give Toys R Us security and a chance to restructure credit and pay off its debts.