Fears for last part of Woolworths

The surviving part of the collapsed Woolworths empire may be placed in administration by the end of the week in a move that could hit the chain's pension fund, it was reported today.

The group's 40 per cent stake in 2Entertain media publishing business is understood to be poised to go into administration as Woolworths is said to be at loggerheads with joint owner BBC Worldwide over the sale of its shareholding.

BBC Worldwide - the BBC's commercial arm - is thought to have slashed its offer price for the holding as it believes the value has been hit by the collapse of Woolworths' other operations last week, according to The Times.

Woolworths' banks now reportedly fear they may be forced to put the 40 per cent stake in administration by the end of the week if talks are not successful.

It is believed a failure of the sale could leave Woolworths' 10,000 pension fund members in the creditor queue, as the Woolworths final salary scheme is in line to receive the first £50 million from the proceeds of any sale of the 2Entertain stake.

The scheme members can turn to the pensions lifeboat Pension Protection Fund, although this does not cover 100 per cent of future retiree payouts.

BBC Worldwide moved to reassure that it was still in talks with Woolworths.

A spokeswoman said: "We hope for a good outcome. We are still in talks with Woolworths and hope we will be able to secure a deal sooner rather than later."

She added: "2Entertain categorically won't go into administration - it's well funded and profitable and fully able to meet all its liabilities."

Woolworths' 813-store retail arm and the wholesale business Entertainment UK (EUK) went into administration last week after suffering cash flow problems.

Its 2Entertain business used EUK as a distributor and troubles at the operation are thought to be having a knock-on effect on the publishing group.

High street retailer Zavvi said last night it had stopped taking DVD, music and games orders after the collapse of Woolworths left it unable to guarantee delivery.

Zavvi said it also planned to cancel all existing customer orders where stock could not be guaranteed as most of its DVDs, music and games products are supplied by EUK.

The BBC played down the troubles at EUK and its impact on 2Entertain, saying it was "only one of its distributors".