Toys R Us UK has made concessions over its pension deficit in an attempt to push through a deal that would save the embattled retailer from collapse, according to reports.
The firm reportedly tabled a fresh proposal to eliminate the pension shortfall during a meeting with the Pension Protection Fund (PPF) yesterday.
The deal cited by the news organisation would shift its deficit recovery plan to 10 years from 15 years and offer a larger payment than the £1.6 million planned for its pension scheme in January and March.
Around 3,200 jobs at Toys R Us currently hang in the balance because the PPF refuses to back the retailer’s rescue plans unless it agrees to pay £9 million upfront into its pension fund.
The PPF is demanding that Toys R Us makes the payment to secure three years’ worth of funding upfront for its defined salary staff pension scheme, which has a shortfall of between £25 million and £30 million.
But it is believed Toys R Us does not have enough cash to meet the PPF demands.
The PPF’s proxy vote intentions mean the planned company voluntary agreement (CVA) may not go ahead, as Toys R Us needs the backing of 75 per cent of creditors, including landlords.