Green offers more cash for Arcadia pension scheme, but is it enough?

By

Sandra Halliday

Published
Jun 4, 2019

As Sir Philip Green prepared to face Arcadia creditors for a series of votes (due Wednesday) around its proposed company voluntary arrangement (CVA), late on Tuesday it emerged that he has offered an extra £25 million in the form of security over property assets to be pumped into the company’s pension fund.

The move came in the face of opposition from Britain's pensions watchdog to Arcadia’s previous proposals. The company’s creditors will vote on the business’s plan on Wednesday and a big stumbling block to it getting the 75% approval its needs is the £750 million black hole in the pension fund.

The UK's Pension Regulator had already said that it wouldn’t support the previously proposed deal due to what it sees as inadequate funding for current and future pensioners. But there were reports Tuesday that it could support the latest plan.

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Arcadia had earlier proposed a package of cash and other assets adding up to £360 million to allow it to reduce its annual cash payments into the fund from the current £50 million down to £25 million. But the regulator had wanted a package worth £410 million. As it currently stands, with the extra money on the table, the total would be £385 million.

If that's enough to get the watchdog on board, then the next giant stumbling block will be the company’s landlords whose support for the CVA is still not guaranteed. If the plan doesn’t get through, the company could be in administration by Wednesday evening.