Woolworths Share Discussion Threads

[loganair] 04/2/2009 12:31

Just another little intersting snippet:

Ardeshir Naghshineh said: "that he and others asked for help from Business Secretary Peter Mandelson, "which was not forthcoming".

"It is hardly impressive that the shop leases which experts commissioned by us valued at around £400m are now practically worthless," Mr Naghshineh added.

[davy99] 04/2/2009 12:31

The Sun (Secondary article)

Supplier grief but it's legal

By STEVE HAWKES
Business Editor

THOUSANDS of suppliers may think it stinks but Deloitte's handling of the Woolworths administration is completely legal and above board.

Secured creditors are first in line and that's almost always the banks.

There's a reason Neville Kahn has earned a glowing reputation with lenders - he always gets their money back when retailers go bust owing them millions.

It's not for nothing he's been dubbed The Undertaker of the High Street.

The clinical handling of Woolies will upset the thousands of staff who felt Deloitte never really entertained the option of selling the business as a going concern.

The small fortune made from Woolies in a month suggests there was a viable business just waiting to get out if directors had restructured the business. But we will never know.

The iconic, 99-year-old Woolies brand was sold off to an internet operator on Monday - because it offered more than anyone else including ex-boss Tony Page.

In Deloitte's world, it's as simple as that.

[davy99] 04/2/2009 12:27

The Sun

Pick and Fix

By STEVE HAWKES
Business Editor

BANKS will get back all £335MILLION they lent Woolworths – but thousands of suppliers and ex-staff will miss out, it emerged yesterday.

Administrators said they had generated a record haul from breaking up the pick 'n' mix retailer in the run-up to Christmas.

But just SIX banks – including Barclays and a subsidiary of Bank of Ireland – will get their money back.

More than 10,000 creditors will go without.

The Government may also have to top up a £63million hole in the staff pension scheme but the final break-up figures will not be known for a month.

And while Woolies' 27,000 staff will get £5million of holiday pay owed to them they will be left with just statutory redundancy payouts. Former Woolies workers said that they were "saddened" by the outcome but not surprised, given the way that the retailer had been run in December.

One told the Sun: "It's the way it goes isn't it? The administrator always seems to make just enough to pay off the banks and no one else."

Administrator Deloitte was appointed to Woolworths last November and is thought to have made nearly £20MILLION in fees. It rejected a host of tentative offers for the business in favour of selling individual stores. Around 300 of the 807 are expected to be sold to other retailers.

Woolies also enjoyed record trading in the run-up to Christmas as Deloitte launched one-day sales "spectaculars". It even sold shop fittings to raise cash before the last store closed in January.

Neville Kahn, a partner at Deloitte, insisted creditors at a meeting yesterday had no complaints about the way the administration had been run.

And he said Deloitte would investigate if Woolworths had been trading insolvently before it collapsed three months ago.

Probe

Mr Kahn said. "They were expecting to make a £50million loss over the year to January 31 and we need to look into whether they should have stopped trading earlier."

Deloitte sold the Woolworths name – along with its Ladybird kids' clothing brand – to home shopping giant Shop Direct on Monday, in a deal believed to be worth £10 million. A web-only Woolies will relaunch in the summer – complete with its famous pick 'n' mix sweets.

[loganair] 04/2/2009 12:10

Some have posted how much were the rents on Woolies stores, to give some idea:

Derby 11,590sq ft - £129,415 per annum rent.

[loganair] 04/2/2009 11:42

Only 141 lease sold when Deloittes stated as late as the 31st December that 300 were under offer and good interest was being shown in another 500.

It appears that most of the other leases that are likely to be sold are going to Iceland.

"Kahn said administrators had sold 141 leases to shops and 55 more were in the pipeline. No freehold sales have been completed yet. Frozen food group Iceland will spend up to £30m adapting the stores and boss Malcolm Walker said it may acquire up to 50 more sites when that process is complete. The first shops will employ about 2,500 staff."

"Regional chains B&M Bargains and Home Bargains, which both operate principally in the North West and the North, acquired about 20 stores each"

Primark have taken another 15 leases, they have also picked-up some leases from Zavvi. "contrary to speculation, Primark has little interest in Woolworths' stores, which are generally too small"

[fazersix] 04/2/2009 11:13

That other twist has arrived from dolittles as someone named them.

A ticket to ride this admin thingy £22k per hour maybe deloittes get half a billion !

[davy99] 04/2/2009 11:11

loganair-Be interesting if they reply.

Daily Mail




Other retail News, Baugur filing for Chapter 11 bankruptcy with £1 billion debt, effects other UK retailers:

[loganair] 04/2/2009 10:53

I have just sent Deloittes an e-mail asking them to explain the difference between their woolworths liabilites of £1.1 billion and Woolworths last set of accounts with nett assets of £235m.

[davy99] 04/2/2009 10:37

westcoastrich- I somehow doubt that. Glad you put imho!

[loganair] 04/2/2009 10:32

What I would like to see - when a company is put in to Administration the last two sets of accounts to be re-audited by an independent set of auditors.

[westcoastrich] 04/2/2009 10:32

Davy
the £1.1 billion is deloitte spouting misinformation while they steal the cash imho

[davy99] 04/2/2009 10:29

loganair- There may have been additional closing costs, but I agree shouldn't have added up to £1.1 Billion. Maybe false accounting previously, it will come out if that is the case.

[westcoastrich] 04/2/2009 10:24

Rents payable until the date of actual store closure, although Chris Eyre at Deloitte would like to think otherwise.

Rates payable, no cop out on that one.

Its in Deloittes interests to blag a big number at this point re creditors so people give up the chase.

Remember, if they can be shown to have misaapropriated the money, Deloittes partners are PERSONALLY liable.

[loganair] 04/2/2009 10:18

Davy - What I'm saying is how can there be a £1.3 billion plus difference in just 6 months from having nett assets of £235m to liabilities of £1.1 billion.

If the Deloittes figures are ture, which I'm not disputing,then the Woolworths accounts produced for us the share holders were FALSE and therefore both Woolies directors and Auditors have committed crimal offence of Falsifying Accounts.

[acornoptical] 04/2/2009 10:16

please davy [e-mail]

[davy99] 04/2/2009 10:12

Believe rent paid up till end of 4th quarter 25th Dec.

[acornoptical] 04/2/2009 10:05

did they stop paying rent and rates after the third quater?....for people that invested in them after the last results on the basis of nav and going in to what would normally be the better tradeing time those figures must have beem misleading at the least.
deloite are saying the were on course to loose 50mil in the full year so that meansthe 2nd half they got back 50mil of the loss made in the first half which was 100mil.
is there a mention of turnover in the administrators report? because that and the sale of asetts so far would make interesting reading

[loganair] 04/2/2009 09:19

Woolworths August Report.

Assets
Non-current assets
Goodwill........................£ 60.9m
Other intangible assets.........£ 76.8m
Property, plant and equipment...£290.1m
Fixed asset investments.........£ 0.2m
Deferred income tax assets......£ 28.6m
Total...........................£456.6m

Current assets
Inventories......................£447.8m
Trade and other receivables......£287.9m
Derivative financial instruments.£ 1.4m
Current asset investments........£ 5.3m
Cash and cash equivalents........£ 48.0m
Total............................£790.4m

Current liabilities
Borrowings...................................(£304.2m)
Derivative financial instruments.............(£ 14.6m)
Trade and other payables.....................(£452.7m)
Current income tax liabilities...............(£ 3.5m)
Provisions for other liabilities and charges.(£ 7.1m)
Deferred income tax liabilities.............. -
Total........................................(£782.1m)

Non-current liabilities
Borrowings...................................(£ 38.3m)
Trade and other payables.....................(£ 79.6m)
Retirement benefit obligations...............(£ 80.9m)
Provisions for other liabilities and charges.(£ 30.9m)
Total........................................(£229.7m)

Net assets....................................£235.2m

[loganair] 04/2/2009 09:16

Davy - Remember an ealier post of mine - Nett assests shown in Woolies last set of accounts does NOT INCLUDE any resale value of any division, just the assests of the said division.

Redundancy payments for 30,000 staff at the minimum per year worked that is set by HMG will come to in the region of £75m to £90m, assuming the average number of years worked is between 8 and 10.

[davy99] 04/2/2009 07:36

The Independent

Woolworths' main banks get repaid in full

By James Thompson

Wednesday, 4 February 2009

Unsecured creditors to Woolworths will receive almost nothing from its administration, while the pic 'n' mix retailer's main lending banks are likely to recoup all the money they are owed to the tune of £335m, it was revealed last night. The administrator Deloitte also said it has been asked by a creditor to investigate why Woolworths did not stop trading earlier in order to give it more time to secure a successful sale of the business before it collapsed into administration on 27 November.

The revelations from Deloitte followed a creditors' meeting in north London yesterday, which was attended by 40 creditors for Entertainment UK, the group's wholesale entertainment arm, and 50 for Woolworths'retail division.

Neville Kahn, the joint administrator and partner at Deloitte, said the six senior lenders to Woolworths – which include the Bank of Ireland's subsidiary Burdale Financial and the private equity-owned GMAC Commercial – will be "paid in full". Once senior lenders have been repaid, a second-tier of creditors, including two unnamed hedge funds, could receive £37m, while pension fund trustees could be repaid £63m.

The two hedge funds invested in Woolworths Group around the time of its refinancing in January 2008.

However, Mr Kahn said it was "highly unlikely" that unsecured creditors, including suppliers and about 30,000 employees, will receive any money. Mr Kahn stressed that Deloitte had paid Woolworths' employees their wages and that they would get back their holiday pay, equivalent to £5m, in full. Staff will also receive the statutory redundancy package from the Government.

More negatively, the Government has yet to conclude how much of their company pension employees will receive. The Woolworths pension had a deficit in excess of £200m.

The total amount of unsecured debt in the EUK and Woolworths' retail division that will not be repaid is £1.1bn.

In the report, Deloitte cited the problems that Woolworths faced in November, including working capital pressures from the withdrawal of creditinsurance and the lack of additional debt capacity that restricted its ability to purchase stock.

Mr Kahn said that Woolworths had forecast to make an operating loss of £50m for the year to 31 January 2009, compared with a profit of just under £4m for the previous year.

Of Woolworths' store estate of 807 that closed in early January, 141 leasehold stores have been signed over to new landlords and a further 55 are in the pipeline. Mr Kahn said he expected to sell between 200 and 300 stores.

Deloitte said that talks to sell Bertrams, the group's book distribution arm, are ongoing. Woolworths is also still in protracted negotiations with the BBC over the sale of its 40 per cent stake in 2Entertain, its publishing joint venture with the broadcaster.

[davy99] 04/2/2009 07:27

loganair & F6- A lot of things dont make sense, but I assume the administrators have their figures approx correct as things are at the moment.

Deloittes say they don't know how much Woolworths owe in redundancy payments, then they say employees redundancy comes into the category as unsecured creditors. The total unsecured credit amount is shown as £1.1 billion. So are the large redundancy payments included in the £1.1 billion.

One thing is more certain than ever, definitely nothing left for shareholders. Even most creditors aren't getting paid out.

Before administration EUK had a resale value, now it only has debt & liabilities.
Loganair, I agree last results need investigating, maybe Deloittes will do that.

I wonder how many UK companies ever come out of administration- very few I would think.

[fazersix] 03/2/2009 23:40

:The first time ive heard of unsecure lending £1.1 Billion Pounds :

Directors could not be reached for comment last night. They took legal advice repeatedly in the final weeks of Woolworths' existence as a public company, as they tried to agree a rescue deal without breaching their duties to creditors.

Deloitte said on Tuesday that it would Recover Enough Money after selling off the retailer's assets to Pay the Full £333.5m Owed To Senior Lenders. However, unsecured lenders were "highly unlikely" to receive any of the £1.1bn they were Owed.

Mr Kahn and his team have sold anything they could from the collapsed store's estate, from sweets to fixtures and fittings. About 200 leases have been sold as part of the transactions, while a 40 per cent stake in a publishing joint venture with BBC Worldwide, a books wholesaler and some remaining properties are still up for sale.

Aside from the £333.5m owed to six senior lenders led by GMAC and Burdale, Mr Kahn said he expected to be able to pay back at least part of the £100.4m owed to creditors further down the list – second lien-lenders, which are ADM Capital and Davidson Kempner Capital Management, the distressed debt investors, and the Woolworths pension fund.

Woolworths was forecast to make a £50m loss in the year to January 31 2009, but its lenders failed to agree a financing plan with directors to take the struggling company into the new year.

[fazersix] 03/2/2009 23:29

Davy99 read that article but imho still doesn't balance up, last year they made £4m profit, so where has 1.1 Billion pounds plus shareholders money gone in 12 months of trading to jan 09 plus the sell off/fire sale.

WLW loss to jan 09 £50m
WLW profit jan 08 £4m