The taxpayer-owned Royal Bank of Scotland stands accused of taking a decision to scale back its lending exposure to troubled high street operators, potentially killing retailers and risking major job losses.
Sources close to the rescue talks over the discount clothes chain Peacocks said that after months of positive negotiations the bank suddenly went cold on plans to refinance the company. The bank's decision could push the chain into collapse, and administrators at KPMG are waiting in the wings.
According to those close to the negotiations, RBS bankers flagged the change of course at a meeting just over a week ago. Peacocks' other bank, Barclays, has remained supportive and prepared to keep lending.
One source at the meeting said: "It was unbelievable. They just suddenly said they were taking a different view of retail businesses and could no longer support the process. Management were furious. This is a decent company, with growing sales but way too much debt."
Another said: "Their behaviour has been outrageous. Now we're looking at a potential threat to some 13,000 jobs. Is this the way a taxpayer-owned bank should operate?"
RBS and Barclays had been negotiating with shareholders on a potential debt-for-equity swap to reduce Peacocks' borrowings.
Peacocks, chaired by the former Asda and Royal Mail boss Allan Leighton, has been struggling to service its £240m debt. Last year its underlying profit before interest payments was £70m.
However, attempts to find new investors have repeatedly failed.
RBS denied there had been a change in its lending policies towards the retail sector as a whole, highlighting that it has remained supportive to another troubled chain, HMV. "Each company restructure is judged on its own merits," it said. But it added: "Clearly the difficult conditions retailers face is an important factor."Reuse content