One of the oldest brass mills in the UK, McKechnie Brass, called in administrators on 30th December and had to let 60 members of staff go, leaving only 15 employees. The business had suffered large financial losses and struggled with scrap brass prices. It previously entered administration in 2011 but was bought by Grove Industries in the West Midlands.
The company has worked with engineering firms for over 140 years but is now trying to arrange a buyer the second time round, with the help of Duff & Phelps. It could no longer cope with the market’s difficult trading conditions and felt administration was the only solution. It’s been reported that McKechnie made a pre-tax loss of £1.2 million last year, even though Grove Industries had injected finance into the business.
Many are sad to see the business in trouble as it is one of the last standing brass mills in the UK. If no buyer can be found, many engineering companies will be forced to obtain material overseas and the UK will lose yet another homegrown business.
It’s worth pointing out that directors have the power to appoint administrators with the aim to sell the business if they feel there is no other way forward. If your company is struggling, you may be able to arrange a trade sale, however this can be difficult if the company is insolvent, as most buyers will not want to take on debt and aggressive creditors. Using a CVA or Pre-pack administration are alternative options and can be very powerful tools to help companies turnaround or move on.