Poundland's future hangs in the balance as chain edges towards collapse

The future of Poundland hangs in the balance as the discount chain edges towards collapse, the BBC understands.

The retailer has filed a notice of intention to appoint administrators, which if approved by the High Court, will give the business 10 days breathing space to find a rescue deal.

Poundland's managing director Barry Williams wrote a memo to his 12,000 staff across its 600 stores on Tuesday saying the American owner of the chain had limited the chain's access to funding.

Gordon Brothers bought Poundland, which had been struggling, from the Polish retail group Pepco last year for a nominal £1.

But little over a year later it put the business up for sale in September.

Irish firm Martin Property Group (MPG) put forward a bid to take the business on as a going concern, but it is understood this did not meet Gordon Brothers' expectations.

Gordon Brothers wants to recoup a £30m shareholder loan it inherited from the previous owners as part of a its deal, but it is understood the Martin Property Group offer fell short of that £30m total.

It is understood MPG wasn't prepared to pay the full amount in advance.

For now, Poundland is heading towards an insolvency process as Gordon Brothers either look for a new owner through what is known as a pre-pack administration, or it could break the business up and sell parcels of stores to interested parties such as Iceland, Lidl, and B&M.