Toys R Us has proposed a deal that could wipe out its pension deficit within a decade in an eleventh-hour attempt to stave off a collapse threatening 3,200 jobs.
Sky News reports that the company made the proposal at a meeting with the Pension Protection Fund on Tuesday.
The offer would reduce toys R Us’ deficit recovery plan from 15 years to ten years and includes an injection of a sum greater than a planned payment of £1.6m into its pension scheme in January and March.
The offer however falls short of the PPF’s demand for a £9m up-front contribution to the scheme – an equivalent of three years of company payments and associated levies – which according to sources and at time of reporting, Toys R Us has not found to pay.
The retailer needs the PPF’s support at a vote of creditors on Thursday for a restructuring that would involve the closure of a quarter of its stores and lower rent bills at many others.
The pensions lifeboat has said that it intends to vote against the plan because it does not offer adequate support for the toy retailer’s retirement scheme.
Without the PPF’s backing the Company Voluntaryt Arrangement will fail, with Alvarez & Marshal on stand-by to handle a pre-Christmas administration.
One source indicated that the additional contributions offered by Toys R Us over the next three months would be marginally superior to the likely returns to the PPF if it were to fall into administration.
The creditor vote takes place on Thursday morning in London.