25 November 2008

Bank of Ireland Could Force Woolworths Into Administration

Woolworths Group's biggest shareholder Aredeshir Naghsineh and Chairman of property developer Targetfellow has travelled to London today determined to save the Company from falling into the clutches of the administrator.

Woolworth's who's shares have lost over 90% of their value in the last year is currently locked in talks with its bankers the Bank of Ireland to try to save the Company.

The boards current master plan appears to be to persuade restructuring specialists Hilco to take on part of the Company's £385 million debt in exchange for the entire property portfolio leaving the demerged group with the distribution and publishing business, believed to be worth around £200 million. It is understood that the smaller group would carry debt of around £85 million.

Woolworth's currently owns the freehold and leases of 819 stores in virtually every major town and city across the UK and are believed to have been valued at between £100,000 and £5million a piece. If the deal goes ahead Hilco will acquire a property portfolio that values Woolworth's stores at just £350,000 each.

Naghsineh, a property expert himself, will not have missed the point that Woolworth's assets are probably grossly undervalued.

Woolworth's investors and their 30,000 employees haven't had a lot to smile about over the last few months, however, as their major shareholder and property tycoon considers his next move there is a real chance that Aredeshir Naghsineh will be able to save the board of Woolworth's from the banks and possibly themselves.

The shares are currently changing hands at 1.3p this afternoon.

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Woolworths went into administration on  27th November 2008

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