The specialist retail investor which owns Homebase has pumped millions of pounds of additional funding into Wilko to help salvage its future.

Sky News has learnt that Hilco has agreed to lend about £5m to Wilko as the general merchandise chain faces an intensifying cash squeeze.

The new debt comes in addition to a £40m loan Wilko secured from Hilco at the start of the year.

One retail industry source said the latest injection showed Hilco’s intention to support the family-controlled retailer as it races to secure a long-term solution to its financing challenges.

Last week, Sky News revealed that the Wilkinson family, which established the business in 1930, was exploring a change of ownership for the first time as it faces running out of cash within weeks.

Sources said large general merchandise chains had been approached about recapitalising the business in a deal that could see the family relinquishing majority control.

PricewaterhouseCoopers (PwC), which is advising Wilko, had already started discussions with prospective financial investors about raising new equity to fund the business through a complex restructuring process.

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Wilko employs about 12,000 people and trades from 400 stores, making it one of the biggest privately owned retailers in Britain.

In a statement last week, Mark Jackson, Wilko chief executive, said: “We’ve been very open that we’re exploring all the options available to rebound as a business and maximise the significant opportunities that we know exist.”

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Like many high street retailers, Wilko has been hit by inflationary pressures and supply chain challenges.

In recent months, it has been seeking to finalise a company voluntary arrangement (CVA) – a mechanism that would trigger steep rent cuts at hundreds of stores.

Under the CVA proposals pitched to creditors, no store closures would take place.

However, the launch of a CVA has begun to look increasingly unlikely as Wilko seeks new funding.

The company is likely to face falling into administration by the end of August without it.

Hilco declined to comment on Sunday, while Wilko did not respond to a request for comment.

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