Toys R Us UK on brink due to £15m tax bill

Advisers to the toy retailer are scrambling to secure new investment by the middle of next week as the business faces a £15m tax bill, due on February 27, according to Sky News.

Privately owned toy retailer The Entertainer and restructuring firm Alteri Investors are both understood to have expressed interest in buying parts of the business in the last few weeks.

Hilco, another restructuring firm, has also been linked with the deal.

According to Sky, Hilco has tabled a deal to take on a clutch of the retailer’s 105 stores but is only willing to go ahead if it is structured as a pre-pack administration.

At the end of last year, Toys R Us’ creditors voted in favour of the toy retailer’s survival plan, averting the immediate threat of administration.

The restructuring plan, involving the closure of at least 26 unprofitable stores and around 500 job losses, was aimed at relieving the retailer of some of its unmanageable costs.

Toys R Us’ North American business filed for bankruptcy protection at the end of last year.

The business has been struggling with structural changes, an oversized estate and increased competition from Amazon and the grocers.