Poundland rescue deal at risk as councils chase unpaid business rates

Poundland is facing uncertainty over a possible rescue deal as the discount chain has been hit with a series of court claims on outstanding taxes.

Several local councils are understood to be chasing the retailer for unpaid business rates worth millions of pounds, The Telegraph reported.

It is thought that Poundland was hoping to write off the payments under its radical restructuring plan drawn up by management.

The retailer is planning to shutter as many as 200 stores and impose steep rent cuts of up to 50% on hundreds more via a court-sanctioned restructuring scheme. It has around 800 stores nationwide and employs 16,000 people.

Poundland is also proposing a freeze on future business rates payments for up to nine months if a sale is agreed. However, such proposals will need approval from a judge.

The retailer has been in discussions with potential suitors after its owner Pepco placed the chain up for auction in March. It is thought that Gordon Brothers, the former owner of Laura Ashley, is the frontrunner to take on the chain.

Sky News reported this week that a possible deal could see Pepco inject tens of millions of pounds into the company to finance its operations.

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