PPF backs Arcadia CVA ahead of crucial vote

Arcadia owner Philip Green has achieved the support of the Pension Protection Fund (PPF) for its latest pensions offer, ahead of the crucial vote today (5 June).

The new package, which has also been agreed by The Pensions Regulator (TPR), brings the total security value of the scheme to £210m, in addition to the £100m contribution previously promised by Lady Green.

According to Sky News reports, Intu Properties, which owns the Trafford Centre in Manchester, is opposing the deal which would close 50 stores and see rent cuts to 150 more.

As Arcadia Group’s largest creditor, the PPF’s support of the company voluntary agreement (CVA) is crucial, however it will now be down to other creditors including Intu Properties, to support the proposals to ensure the survival of the company.

In a statement last night, PPF chief executive, Oliver Morley, said: “We’ve been working hard with TPR and scheme trustees to ensure that Arcadia increases the funding of the pension schemes to a level that will provide for the members and protect the PPF.

“Following these negotiations, we are pleased that the company and shareholder have today agreed a funding and security package for the scheme. Based on this commitment, we will now vote in support of the Arcadia Group Limited CVA tomorrow.”

The lifeboat said it wanted to reassure members of the pension scheme, thought to have a £500m deficit, that they will continue to be protected by the PPF.

The regulator, which has continuously demanded further assurances from the scheme said that it was pleased additional security had been agreed.

A TPR spokesperson 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.”

It added that the CVA proposals now provide the right balance between the protection of the scheme members and the sustainability of the company.

Last month, TPR demanded that Arcadia owner Philip Green provides a further £50m cash injection into the failing retail firm's pension scheme, Sky News reported.

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