200 jobs saved at manufacturer, AEI Cables, in pre-pack deal

4 March 2014

200 jobs saved at manufacturer, AEI Cables, in pre-pack deal

The cable manufacturer based in Birtley, County Durham has been bought by Ducab, a manufacturing group from the Middle East. 

On the 28th February last month, Springfields Business Recovery & Insolvency, were appointed administrators and secured the pre-pack deal with a world leading cable manufacturer, Ducab shortly afterwards , saving 200 jobs. 

Specialising in cables for rail, aerospace, oil and gas industries, AEI began struggling with cashflow due to rising material costs in 2011 and entered a company voluntary arrangement (CVA) to support the restructuring of the business. Unfortunately, 126 jobs were lost.  Come 2014, a pre-pack deal was considered to be the best option to secure the business’s future. 

Joint administrator, Deviesh Raikundalia, commented “the sale secures the future of a well-known and established brand and ensures the continued manufacturing business for the local area.”

AEI currently have a contract approved with the London Underground to use its fire safety products. 

Pleased with the outcome, CEO of AEI cables, Clive Sharp, said "Joining Ducab offers new opportunities in terms of the products and markets we can serve and gives us further advantage over our competitors.”

The company voluntary arrangement held AEI together for as long as possible, allowing it to restructure and free up cashflow. However, in this case, a pre-pack ended up as the best option as it ensured the manufacturers’ future stayed intact. 

A CVA can provide suitable ways to pay back debt to creditors over a number of years, bearing in mind unsecured creditors are bound by a CVA. However, sometimes there still can be financial issues. Pre-pack administration is an option if the company has available funding and is viable. This type of deal can save the business and keep employees on.