Wilko collapsed owing unsecured creditors almost £550mn

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Wilko collapsed owing an estimated £548mn to unsecured creditors, including its own pension scheme and suppliers such as Unilever, Procter & Gamble and Akzo Nobel, who face being left almost entirely out of pocket.

Hundreds of unsecured creditors are expected to recover between 4 per cent and 8 per cent of their debts, or as little as 4p in the pound, according to the administrators’ proposals finalised this week.

The documents also showed that the Pension Protection Fund, the pensions lifeboat, is owed £50mn as an unsecured creditor although it should be repaid a separate £20mn as a secured creditor from property assets at the discount retailer.

When a company enters administration, the pension deficit is recalculated as it no longer receives contributions and Wilko’s stands at £70.2mn. Before the chain collapsed into administration in August, however, the pension deficit had narrowed to £12.2mn in 2022 from £38.2mn in 2019.

Trade creditors were owed £174mn when the discount chain collapsed, with Dove soap maker Unilever owed £3.2mn; Head & Shoulders shampoo owner Procter & Gamble, £8.8mn; logistics firm GXO, £4.3mn; and Dulux owner Akzo Nobel, £5.4mn.

Secured creditors such as Hilco, the specialist retail lender that has separately been handling Wilko’s liquidation of stock in stores, have already been paid. Hilco has received the almost £40mn it was owed, as has Barclays bank, which was owed £2.4mn.

PwC calculated that the taxman was owed £15.9mn, but it is expected that this debt will be paid almost in full.

Wilko’s family owners paid themselves £9mn in dividends since 2019, according to administrators.

Jonathan Griffin, a director at Amalgamated Holdings Wilkinson Limited, the ultimate owner of Wilko, had previously told the Financial Times that dividend payments did not contribute to Wilko going into administration and said they “were paid within the financial framework regulating dividend payments and after the Wilko board had received a recommendation from the chief financial officer that it was prudent to pay them”.

Turnover fell from £1.5bn in 2019 to £1.3bn in 2022, while underlying profits dropped from £33mn to £16mn during the period.

Before PwC was formally appointed as administrator it was already owed £571,000 in fees, with the final bill expected to be higher.

The total sum owed to unsecured creditors includes three Wilko subsidiaries — Wilkinson Hardware Stores Limited, wilko.com Limited and Wilko Limited — as well as lease liabilities.

Unilever declined to comment. Procter & Gamble, GXO and Akzo Nobel did not immediately respond to a request for comment.