Sir Philip Green close to deal over Arcadia pension deficit

Sir Philip Green is understood to be close to agreeing a deal with regulators to plug a hole in Arcadia Group’s pension fund, paving the way for a rescue restructure of his fashion retail empire.

An announcement could come as early as Tuesday afternoon. The move by the former billionaire follows a demand from the Pensions Regulator that he inject another £50m into the fund. This would come on top of a promise by Green and the company to put in £360m over three years.

It is unclear exactly how much extra Green has agreed to, but one source said he wanted to make a “squeaky clean” deal that could not be questioned in future.

Arcadia’s plan to cut rents and close stores via an insolvency procedure known as a company voluntary arrangement relies on reaching an agreement with the Pensions Regulator over funding of the retailer’s pension deficit of up to £750m.
As a major creditor, the fund will have a significant vote at a meeting on Wednesday that is required to secure the CVA and avert a collapse into administration for Arcadia, which would put 18,000 jobs at risk.

The group, which operates 570 shops from Topshop to Burton and Miss Selfridge, must win approval from 75% of its creditors, most of whom are landlords. The restructure will enable it to close at least 23 stores and cut rents by up to 70% on nearly 200 more.

A further 25 UK stores are set to close as Arcadia puts the property holding companies of Miss Selfridge and Evans into administration. It is also closing 11 Topshop stores in the US.
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