Poundland owner Gordon Brothers releases £10m as administration deadline nears

Sky News reported on Tuesday that Gordon Brothers had unlocked around £10m held on Poundland's balance sheet, and BusinessCloud said the money is meant to pay suppliers. Sources told the BBC the sum was modest but could put off a collapse while a longer-term deal is sought. About £50m had been frozen, the BBC understands, which left the chain unable to restock. According to Sky, Poundland has placed no orders with suppliers for at least two weeks.

Poundland has filed a notice of intention to appoint administrators, which gives it a 10-day moratorium against creditors. That runs out on Thursday. The BBC said it can be extended if a solvent sale looks possible, and its sources expect more time to be granted. Gordon Brothers' UK lead faces questions from MPs on the business committee on Wednesday about the search for a buyer.

Gordon Brothers, which paid £1 for Poundland last summer, rejected a bid from the management team backed by Martin Property Group because it wanted a £30m shareholder loan repaid in full, BusinessCloud reported. Xyra Group, a little-known London investor, has reportedly offered £12.5m of that loan up front, with the rest deferred. The owner says the chain is still challenged and vulnerable. Barry Williams, who runs Poundland, told employees it made an £18.1m profit in the year to September, after a £68m loss the year before. The BBC said Gordon Brothers denies accusations that it wants to sell the stores and stock piecemeal.

No administrator has been appointed, and the shops are open. Poundstretcher, Tesco and B&M have shown interest in taking over stores if the chain is broken up, the BBC reported. None of the reports mention arrangements for gift cards or refunds.