Poundland has distanced itself from its embattled South African parent company Steinhoff by striking a separate £180m loan facility deal to reassure suppliers.
Pepkor Europe, the group that owns Poundland and its Dealz brand in Germany as well as discount fashion chain Pep& Co, said that it was "now not dependent on working capital support from parent company Steinhoff International".
The loan facility, provided by US investment firm Davidson Kempner, will replace the investment Pepkor Europe thought it would be receiving from Steinhoff to press ahead with its expansion plan.
The business can no longer rely on the troubled South African retailer for any investment since Steinhoff has been engulfed in a €6bn accounting scandal which has wiped 90pc of the value from the company.
In December Steinhoff admitted that lenders and credit insurers were pulling facilities from its string of retail businesses.
Pepkor Europe said the new loan "provided stability for its retail brands" and that it was "business-as-usual in its stores and for its 29,000 employees across Europe".
However, the retail business is still owned by the troubled South African retail conglomerate and has a number of intercompany loans.
Sources say that Poundland could still be put up for sale by Steinhoff as it seeks to raise €3bn to repair its balance sheet from asset sales.
Andy Bond, chief executive of Pepkor Europe, said that the business was still "firing on all cylinders" and "independent, profitable and delivering positive cashflows". In a crisis meeting with Steinhoff's lenders in December Mr Bond revealed that like-for-like sales growth continued at 4pc and while Pep&Co like-for-like sales were growing more than 20pc.
The company, which has 2,095 shops across 8 European markets, generated sales of €2.8m (£2.4m) last year.
“Because of this strength, despite the ongoing issues faced by our parent company, we have been able to work quickly over Christmas to activate new sources of funding that will enable us to reassure suppliers, implement our investment plans and secure the future of these successful businesses," said Mr Bond.
At the start of this week, Steinhoff warned that its "financial irregularities" stretched back before 2015, a year earlier than initially thought, meaning it will have to restate more of its accounts.
Last week Moody's downgraded the credit rating of Steinhoff, once seen as South Africa's answer to Ikea, to CAA1, indicating a very high risk of default.
“Moody’s notes the operating companies have experienced a reduction or cancellation of credit insurance lines in recent weeks, with credit facilities increasingly being suspended or withdrawn," the rating agency said.
“Consequently, Steinhoff's liquidity levels could prove insufficient to sustain its European operations in the near term if it is unable to shore up its cash balances or other sources of liquidity.”