Sir Philip Green agrees to put extra £25 million into Arcadia’s pension fund
Sir Philip Green is expected to clear a major hurdle in his efforts to rescue his Arcadia retail group later after agreeing to inject an additional £25 million into its pension fund.
The Topshop tycoon received the backing of regulators after proposing a cash and security package worth £310 million.
The Pensions Regulator had previously told Sir Philip he needed to top up his contribution if it was to support a company voluntary arrangement (CVA) for Arcadia.
The group, which has nearly 10,000 pension scheme members, said a voluntary cash contribution of £100 million had been pledged alongside £210 million in security.
Arcadia said Lady Green, the group’s ultimate owner, had signed off the additional cash.
The Pension Protection Fund (PPF) is due to vote on whether to support the scheme on Wednesday.
The Pensions Regulator said: “Following extensive discussions with the company, shareholders, the trustees of the pension schemes, the PPF and advisers, we are pleased that additional security has been agreed in support for the pension schemes which brings the total security value to £210m.
“This is in addition to agreed contributions of £100m to be paid to the schemes by Lady Green.
“Given this enhanced level of support, we now consider the updated CVA proposals are sufficient because they provide better protection for scheme members in these difficult circumstances.
“We recognise that the best support for any pension scheme is a trading employer and we feel the CVA proposals now provide the right balance between security for the pension schemes and the chance of sustainability for the company.”
Oliver Morley, chief executive of the PPF, told the BBC that the body “will now vote in support of the Arcadia Group Limited CVA”.
Arcadia owns Topshop, Topman, Burton, Dorothy Perkins, Miss Selfridge, Wallis and Evans.
If the CVA is approved almost 50 stores will close and rents on nearly 200 shops will be cut.
The group’s trustees said the scheme “materially enhances the security of the benefits of the 9,500 pension scheme members”.
The tussle with TPR had been another headache for Sir Philip, who is also facing down landlords pushing for changes to the CVA proposals.
Under the plans Lady Green offered landlords a 20% stake of any proceeds if the group is eventually sold.
Ian Grabiner, Arcadia’s chief executive, said on Sunday it had been a “challenging time”.
“We hope that the landlords and other creditors will follow suit and we can get the company back on a strong footing in all the markets where we trade,” he said.