Ugo Stores owed Nisa almost £1.9m before the troubled discount supermarket chain collapsed into administration and was sold to Poundstretcher, The Grocer has learned.

The Grocer revealed last week that Ugo had been experiencing serious supply problems after its main supplier Nisa stopped delivering to it in mid-January.

The Grocer has now learned Nisa ceased deliveries because Ugo had defaulted on payment to the buying group, leaving Nisa with a debt of £1.86m. The money has since been recovered via a bank guarantee.

Ugo Stores owner and CEO Arthur Harris insisted last week that Nisa had been “fully paid up to date” and that stock levels were low because the business was preparing for a sale.

Poundstretcher was confirmed as the mystery buyer for the chain this week after Harris announced last week the chain had been sold, without revealing the identity of the buyer. All Ugo stores shut last weekend for “restocking”.

It also emerged this week that Poundstretcher had in fact bought Ugo Stores out of administration as part of a pre-pack deal saving 245 jobs.

Administrators the P&A Partnership, who have acted as administrators for seven former businesses owned by Harris that also collapsed, including Haldanes Stores, said: “We are pleased that we have been able to rescue the business and save so many jobs, particularly given the economic climate for the retail sector.”