26 March 2007
The private equity groups stalking J Sainsbury must be prepared
to deal with a pensions black hole of up to £3bn at the
supermarkets group, according to a report in the Financial
Times.
The last reported deficit in the J Sainsbury pension scheme was
£477m in October 2006, although this figure is expected to
rise to £1bn as the scheme moves to an investment policy
based on bonds.
However, the Financial Times says that the figure rises to
£2bn - £3bn if any new owners of the company make no
further contributions into the scheme. The trustees of the pension
scheme are said to be concerned that private equity buyers would be
unwilling or, because of the debt taken on to buy the group, unable
to make additional payments into the scheme over the next 60
years.
The Financial Times reports that the trustees met with a private
equity consortium last week, and quoted a source close to the talks
as saying: "The pension issue is not a deal-breaker but it is a
difficult issue and it is not easy to resolve unless there is a lot
of money put on the table."
