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Report: Toys R Us UK buyer backs out

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Report: Toys R Us UK buyer backs out

Toys R Us' U.K. arm lost a potential buyer in time to pay its tax bill due on Feb. 27, the Financial Times reported Feb. 24, citing unnamed sources.

Company executives reportedly told Pension Protection Fund officials on Friday that a prospective buyer had walked away. The pension bailout fund, which was set to become one of the company's biggest creditors, initially wanted to block Toys R Us U.K.'s restructuring plan but later backpedaled after securing £9.8 million in pension contributions, which then paved the way for a restructuring plan that involved shutting down 26 of the retailer's 105 stores in the U.K.

The unit could go into administration, the FT said, with Moorfields Corporate Recovery already in line to take over the retailer's operations as early as Tuesday if it fails to secure a buyer, according to "a person briefed on the plans".

Toys R Us' U.S. chain was recently reported to be closing 200 more stores as part of its plan to emerge from bankruptcy.