LloydsPharmacy, one of the UK’s most prominent pharmacy businesses, has entered into liquidation. The company faces debts of £293 million owed to more than 500 creditors. Over the past year, Llloyds underwent an extensive divestment initiative. This enabled them to sell off individual assets or packages of pharmacies, ultimately liquidating its entire high street portfolio. 

Turpin Barker Armstrong Accountants, overseeing the liquidation process, revealed the significant amounts that are owed to various parties. This includes £228 million to Admenta, the former owner, and £50 million to Aurelius Crocodile, a holding company linked to private equity owner Aurelius.

Aurelius had acquired McKesson in 2022, the parent company of LloydsPharmacy, in a deal worth £477 million. Following the takeover, LloydsPharmacy retracted its services from all 237 Sainsbury’s supermarkets, citing changing market conditions and putting 2,000 jobs at risk.

Despite the extensive divestment, liquidators estimate that only approximately £8.2 million can be recovered for preferential creditors. Only approximately £800,000 has been allocated for unsecured creditors. 

The company continued its divestment strategy, selling its high street portfolio through various deals, including Jhoots Pharmacy acquiring 36 sites, Co-op obtaining all Channel Islands pharmacies, and Blackadders purchasing 37 chemist shops across Scotland. Notably, staff who were made redundant from LloydsPharmacy’s locations within Sainsbury’s stores last year are currently pursuing employment tribunal claims represented by The Pharmacists’ Defence Association & The PDA Union (PDA). 

However, the recent move into liquidation poses challenges to these claims, as successful claimants may be deemed unsecured creditors, potentially receiving lower priority in compensation. The unexpected announcement of LloydsPharmacy’s liquidation adds complexity to the ongoing legal proceedings and raises concerns about the financial capacity to fulfil compensation obligations.

This unexpected development and liquidation adds complexity to the ongoing legal proceedings. The divestment strategy undertaken by LloydsPharmacy presents an opportunity for distressed business buyers to potentially acquire specific assets at a discounted price during the liquidation process. 

For more information about this situation and similar businesses in distress, stay tuned to Administration List.