A rescue deal for Toys R Us UK is hanging by a thread after one of the company's largest creditors confirmed it intended to oppose the overhaul later this week.
The Pension Protection Fund (PPF) said it had failed to secure reassurances about the security of the Toys R Us retirement scheme and would vote against a store closure and rent reduction plan on Thursday.
It followed a Sky News report on Monday that the PPF, Britain's pensions lifeboat, was demanding a £9m injection into the scheme in order to secure its support for the Company Voluntary Arrangement (CVA) deal.
If it does vote against the CVA, the PPF's decision would plunge the retailer's future - and more than 3000 jobs - into grave danger just days before Christmas.
The CVA requires the support of 75% of creditors, and without that, administration is likely to follow within days.
Malcolm Weir, the PPF's director of restructuring and insolvency, said: "We can confirm that the PPF has today submitted its proxy vote on the proposed Toys R Us CVA by the required deadline.
"We have indicated we intend to vote against the proposals.
"Since the company lodged the CVA proposals we have spent significant time and effort, with the help of PwC, assessing the current and future financial position of the company to ensure the pension scheme would not be weakened by the CVA, leading to an even bigger claim on the PPF and its levy payers further down the line.
"Given the position of the company, we strongly believe seeking assurances for the pension scheme is reasonable given the deficit in the scheme and questions about the overall position of the company.
"We remain in dialogue with the company and their advisors and we are able to amend our vote if suitable assurances provided."
The PPF's suggestion that it could yet change its vote - and swing the CVA back towards approval - will spark a frantic round of talks between Toys R Us and the pensions lifeboat over the next two days, according to insiders.
Toys R Us UK's pension scheme has a PPF deficit of £30m, referring to the sum that would be required to bring the level of benefits up to those which would also be payable by the PPF.
On a full buyout basis, the deficit is £93m, according to a letter sent on Tuesday by Alan Rubenstein, the PPF's chief executive, to Frank Field, the Labour MP who chairs the Work and Pensions Select Committee.
Mr Rubenstein said he was "disappointed" that Toys R Us had not agreed to the PPF's proposal for a £9m sum to be injected into the scheme.
That figure is equivalent to three years of deficit reduction contributions.
Mr Rubenstein said the PPF was "happy to consider further proposals" but added:
"We would hope that there is no hasty entry of the company into administration or liquidation if the CVA proposals are rejected - the company made clear that they believed that the CVA would mean 'no disruption for customers shopping through the Christmas and New Year period'."
Under the CVA plan, at least 26 of the chain's shops will close, with landlords agreeing to substantial rent reductions at many of the remaining outlets, saving millions of pounds a year.
At least 500 jobs would face the axe if the CVA is voted through, but a failure to do so would cast doubt on the future of the remaining 2,700 staff at the company.
Sources said, though, that there was no prospect of the £9m sum being injected into the scheme while Toys R Us's US parent was in formal bankruptcy protection proceedings.
One insider said the PPF was seeking to elevate itself above every other Toys R Us creditor, despite the fact that it was landlords - rather than the pension scheme - facing financial pain as a result of the CVA.
In a letter to Mr Field published on Monday, the trustees insisted that the CVA would "not compromise the scheme" and said the loan write-off "had no impact on the direct covenant provided to the scheme".
The veteran MP expressed alarm, however, saying: "As with BHS, the trustees and pensions regulator were kept entirely in the dark.
"The pension scheme is, at best, an inconvenient afterthought to self-interested corporate restructure.
"The puny regulatory system only kicks in once the damage is done."
Under the CVA plan, the affected Toys R Us shops will remain trading throughout the Christmas period and well into the new year, but will begin closing from next spring.
The chain's larger out-of-town stores will be disproportionately affected by the closure plan, owing to their weak performance amid a fast-changing outlook for the high street.
Retailers including BHS, Focus DIY and JJB Sports have previously used CVAs to exit loss-making stores, although all three companies ultimately succumbed to the fast-changing retail environment.
That track record has caused alarm among PPF executives evaluating the Toys R Us proposals.
The effort to overhaul its UK estate follows the filing by Toys 'R' Us's American parent for Chapter 11 bankruptcy protection in September.
That move has sparked controversy over the company's move to pay up to $21m in bonuses to top executives, which it claims is necessary to motivate them during the critical Christmas trading season.
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