Two Arcadia Group Ltd. pension funds secured £210 million ($266 million) in a security payment and £100 million cash contribution from the owners of the beleaguered retailer, Philip Green and Christina Green, following an agreement with the pension trustee, the U.K. Pensions Regulator said Wednesday.
Subject to approval of the proposal Wednesday, the trustee of Arcadia Group Pension Scheme and Arcadia Group Senior Executives Pension Scheme, both based in London, will receive a £210 million security that materially enhances the security of the benefits of the 9,500 participants, the spokesman for the plan said.
The contribution was secured alongside a voluntary £100 million cash support from Lady Christina Green, the wife of Mr. Green.
Arcadia Group Pension Scheme and Arcadia Group Senior Executives Pension Scheme had an estimated combined deficit of £744 million.
"Given this enhanced level of support, we now consider the updated company voluntary arrangement proposals are sufficient because they provide better protection for scheme members in these difficult circumstances," a spokesman for The Pensions Regulator said.
"Following these negotiations, we are pleased that the company and shareholder have today agreed a funding and security package for the scheme," said Oliver Morley, CEO of the Pension Protection Fund, London, in an emailed statement. The company's voluntary arrangement proposals provide the right balance between company sustainability and security of participant benefits, he added.
"While we are the largest creditor in this CVA, other creditors will also need to agree the terms for it to be successful," Mr. Morley added.