Pensions lifeboat braces for Mothercare to launch rescue plan

(c) Sky News 2018: <a href="">Pensions lifeboat braces for Mothercare to launch rescue plan</a>

Britain's pensions lifeboat has drafted in advisers to prepare for a rescue‎ financial restructuring at Mothercare (Other OTC: MHCRF - news) that is certain to spark further high street job losses.

Sky News‎ has learnt that the Pension Protection Fund (PPF (Shenzhen: 300258.SZ - news) ) is taking advice from PricewaterhouseCoopers (PwC) ahead of a crucial week for the struggling retailer.

The appointment is significant because the PPF will have the largest vote on a Company Voluntary Arrangement (CVA) which is expected to be unveiled next week alongside Mothercare's full-year financial results.

The private sector-funded pensions vehicle, which takes on the retirement funding liabilities of insolvent companies, has been a prominent player in determining the fate of other troubled retailers in recent months, including Toys R Us UK.

Sources said on Friday that Mothercare would aim to set out a "comprehensive package" of measures next week that would collectively safeguard its future.

The company, which has been struggling for years, recently ousted its chief executive and saw its chairman quit midway through the restructuring process.

A CVA proposal would inevitably involve some store closures and job losses, adding to the growing sense of ‎pessimism about the future of Britain's high streets.

Mothercare said earlier this year that it was in danger of breaching borrowing agreements with its lenders, and indicated that its results announcement next week was a critical juncture at which it would need to spell out a survival plan.

One insider said the PPF was being "supportive" of the company's efforts to salvage its future.

The lifeboat's pivotal role is likely to provide it with substantial leverage to demand a greater financial contribution to Mothercare's defined benefit pension scheme.

Alongside the CVA, which will affect an unknown number of the chain's 150 British shops, Mothercare is expected to have secured financial support from suppliers and lenders.

A Mothercare spokesman said:‎ "Mothercare continues to explore a number of options in relation to the group's financing which will allow us to support and maintain the momentum of our transformation programme.

"As previously stated, we remain in constructive dialogue with our financing partners and further updates will be given as appropriate."

The PPF declined to comment specifically on Mothercare but said in a statement that it "provides a valuable safety net for pension scheme members if an employer does go bust".