The pensions lifeboat is demanding that directors of Toys R Us UK line up an independent administrator if rescue talks break down in the coming days.
Sky News has reported that the Pension Protection Fund (PPF) has written to the directors of Britain’s biggest toy retailer to urge them not to appoint its existing adviser on its restructuring to oversee any insolvency proceedings.
The pressure from the PPF comes just two months after Alvarez & Marsal (A&M) secured approval for a deal that was supposed to safeguard Toys R Us UK’s future – and which only secured the PPF’s support at the eleventh hour.
Sources said the PPF, which is Toys R Us UK’s biggest unsecured creditor, was “uncomfortable” about A&M handling the chain’s administration because of its role orchestrating a Company Voluntary Arrangement (CVA) approved three days before Christmas.
They added that PricewaterhouseCoopers, which has been advising Toys R Us UK’s pension trustees for months, was likely to be the PPF’s preferred choice as administrator.
A spokesman for A&M said in a statement issued to Sky News on Tuesday: “We understand that the PPF has written to the directors of Toys R Us UK. We are aware of our professional responsibilities.”
The powers of the PPF, which could not be reached for comment, to influence the choice of administrator is limited. Secured creditors and the company’s directors have the right to choose which firm is appointed, although City sources said it would be “dangerous” to ignore the PPF’s wishes.
The tussle over Toys R Us UK’s potential insolvency comes just days ahead of a deadline for it to pay a £15m VAT bill to Her Majesty’s Revenue and Customs.