Administration and Subsequent Sale of Manufacturing Group

The group, comprising of five companies, manufactured passenger information systems and lighting systems for trains. A bank held a first charge over the company’s property; an invoice financer held a second charge over the property while also having additional charges over the debtor book. The group had previously attempted to attract a suitable buyer or investor, but with a pension deficit of £350K and the company significantly behind in completing contracts due to technical issues, it was not seen an attractive prospect.

Work Undertaken

A series of reviews and turnaround assignments over an 18-month period, this culminated in the company being placed into administration. Trade continued while the company was in administration with a view to selling the business and its assets to its main customer. 

Outcome

Following a short period of trading in administration the business had settled. The business and assets were then acquired by its main customer who required the parts supplied by the Group in order to fulfil their own existing contracts. The deal required a complex round of inter-connected negotiations because of the conflicted position of the purchaser and the relative strengths of the secured creditor’s positions.