On the go: In a last-minute attempt to save his Arcadia empire on Tuesday night, Sir Philip Green sealed a deal with the UK’s Pensions Regulator that has the backing of the Pension Protection Fund for a crucial restructuring of the business.
The pensions watchdog managed to squeeze an extra £25m to boost the Arcadia Pension Schemes fund, although according to Sky Business it demanded an extra £50m just days ago.
The deal should help Green steer Arcadia, which includes retail chains Topshop and Dorothy Perkins, away from collapsing into administration.
Under the terms of the agreement, the company has agreed to provide security for the schemes to the value of £210m (up from an initial offer of £185m), which includes an additional £25m agreed with TPR.
Lady Tina Green is providing, as agreed, a voluntary contribution of £75m over three years to help close the funding deficit on the pension scheme, plus an addition of £25m making a total of £100m.
A spokesperson for the regulator said: “Given this enhanced level of support, we now consider the updated CVA proposals are sufficient because they provide better protection for scheme members in these difficult circumstances. “
The spokesperson added: “We recognise that the best support for any pension scheme is a trading employer and we feel the CVA proposals now provide the right balance between security for the pension schemes and the chance of sustainability for the company.”
The trustees of the Arcadia Pension Schemes also welcomed the deal, which “materially enhances the security of the benefits of the 9,500 pension scheme members”.
The trustee added: “Having engaged extensively with the Pensions Regulator, the Pension Protection Fund and the Arcadia Board to consider its turnaround plan, the total package of support announced provides the best outcome achievable for the schemes.”
Based on the new commitment, Oliver Morley, chief executive of the PPF, said: “We will now vote in support of the Arcadia Group Limited CVA,” which is due to take place this Wednesday afternoon.
The PPF is the largest creditor in this CVA. Other creditors will also need to agree the terms for it to be successful.
Ian Grabiner, CEO of Arcadia Group, said: “We hope that landlords and other creditors will follow suit and we can get the company back on a strong footing in all the markets where we trade.”
