Kwik Save is set to go into 'pre-pack administration' and re-emerge as a chain of stores trading as Fresh Express. Or is it?
As The Grocer was going to press (Thursday), Fresh Express was expected to operate 145 stores, to be fronted by Paul Niklas and Brendan Murtagh - the men who saved Kwik Save from the brink of collapse in March.
A pre-pack agreement would allow the sale of the company's assets to be put in place prior to the passing of the administration order.
It is believed the deal would involve a second round of funding from Murtagh, who will be trying to recoup some of his original multi-million pound investment. Earlier this week, Murtagh sold 2.4 million shares in Kingspan - the construction supplier he co-founded with his brother, to raise €48m (£32.4m).
But after Kwik Save faced liquidation on Wednesday as a result of a winding up petition lodged in the High Court of Justice by creditor Steven Archdeacon, the judge in charge of the case granted Kwik Save a reprieve until after the administration case was heard. And with the subsequent postponement of the administration hearing, which had been set to take place yesterday (Friday), the future of Kwik Save was still not clear.
A pre-pack deal would mean creditors would face an anxious wait to find out if there was any money to pay off Kwik Save's debts accumulated over a torrid year, said a source close to the deal.
"Creditors would not be the first in line to get their debt repaid, but I would imagine there would be some sort of deal done. They would need stock to run the new business.
"The people that stand to lose the most money would be the original investors, including Murtagh, but through the pre-pack deal he would not lose as much as from winding down the business," he added.
Details of the deal, which would save 1,800 jobs, emerged two weeks after 800 jobs were slashed as 79 stores closed. On Monday Kwik Save said it would reopen 20 outlets, but on Thursday union Usdaw said Kwik Save planned to close another 22 stores bringing the total closures to 81.