The entire Woolworths empire, including its stake in 2Entertain, the BBC joint venture, is likely to be in administration by the end of the week, with its 10,000 pensioners at the back of a queue of creditors hoping to get their money back.

Last night lenders, led by GMAC and Burdale, a Bank of Ireland division, were in talks with the BBC and Woolworths about 2Entertain, the media publishing business. It is understood that the BBC is trying to cut its initial £100 million offer to take full control of 2Entertain, which publishes classics such as Blue Planet and Doctor Who. The BBC believes 2Entertain’s value is dropping by the day because of its close links to EUK, Woolworths’ logistics division upon which 2Entertain is reliant for its deliveries.

EUK and Woolworths’ 815 retail stores network was placed in administration last week. It is understood that Woolworths’ lenders now believe they could be forced to push 2Entertain into administration by the end of the week if the retailer’s board and the BBC cannot agree a revised price.

The fate of Woolworths’ pensioners is linked to the sale of the 2Entertain stake to the BBC. Under the terms of the BBC’s first offer, it would have paid £50 million into Woolworths’ final salary pension scheme with the banks taking the remainder.

If 2Entertain falls into administration, then the pensioners may have to turn to the Pension Protection Fund (PPF), the government-created pensions lifeboat, to bring the scheme under its protection. The PPF will commit to cover the scheme’s obligations to employees who have already retired, but it will only meet about 90 per cent of payouts to future retirees, currently capped at £30,856.35.

The collapse of Woolworths has sent shockwaves through industry. Zavvi, the music chain formerly known as Virgin Megastore, stopped taking online orders amid fears that it would be unable to deliver goods. Zavvi, whose main supplier is EUK, said it would refund any orders that are not delivered. The suspension of online orders is as a huge blow for Zavvi in the run-up to Christmas. EUK also supplies Tesco and Wm Morrison, but they will make alternative arrangements to ensure stock is available.

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