Poundland gets more time to secure a rescue deal as emergency talks continue

Poundland looks set to avoid immediate collapse after its US owners told MPs on Wednesday they were in favour of extending a deadline to find a rescue deal.

The discount chain, which has 11,000 employees, has been edging towards administration after being blocked by Gordon Brothers from accessing cash in its bank accounts.

A deadline to secure a buyer for the business is set to expire at midnight, but sources close to the situation told the BBC they expect more time will be given thanks to the release funding in recent days.

A committee of MPs questioned Gordon Brothers following accusations that the investment firm hoped to profit from selling off Poundland's 600 shops and stock piecemeal.

Gordon Brothers - which bought the chain for just £1 last year - is accused of forcing that outcome by restricting Poundland's access to available cash needed to restock shops, and pay wages and rent, ahead of the crucial Christmas trading period.

The investment firm, which specialises in buying and restructuring distressed companies, has denied the claims.

But pressure remains on Poundland's owners after a takeover bid was rejected. The decision prompted calls for answers from politicians, including Prime Minister Andy Burnham.

About £50m had been frozen by Gordon Brothers, the BBC understands, meaning Poundland bosses were unable to restock shelves across its 600 shops.

The BBC understands that Gordon Brothers agreed to release a further £9m from Poundland's accounts, on top of £10m announced earlier. This will grant the company an additional 10 days to find a new buyer.

There are three bids currently on the table for Poundland, all of which have so far been rejected by the Gordon Brothers, who stand to profit from selling the company and its stock in parts.

Following the meeting between MPs on the business and trade committee and representatives of Gordon Brothers, chairman Liam Byrne told the BBC that he was "deeply concerned" and described the firm's behaviour as "much like a wolf on Wall Street, on the British High Street".

"They refused to prioritise protecting jobs and stores over and above their own financial returns," he said.

"It's clear that they've taken millions out of Poundland at a time when they themselves said the business was on a knife edge."

Byrne said the committee's message to Gordon Brothers was to ensure Poundland had "access to the funds that it needs to trade at what should be one of the busiest periods in the year".

He urged Gordon Brothers to "do what is right to save jobs and stores and do that now".

"It's a good business, it's a much-loved business and, particularly in the middle of the cost of living crisis, communities up and down the country rely on access to the kind of stores that it operates," Byrne added.

Following the private meeting with MPs, Poundland's chief executive Barry Williams told the BBC that the chain's board would hold an urgent meeting on Wednesday night.