Vasanat International Ltd, who traded as Scottish Electric Group (SEG), appointed provisional liquidators last week.
The move into liquidation has resulted in almost 100 jobs being lost - a severe blow to the local community. Here, we explore what has happened and what the next steps are for the employees affected by this.
Who are the Scottish Electric Group?
SEG is a Dundee-based company, operating out of Luna Place (within the city's Technology Park).
The company offers a range of electrical services for clients across the country. Its most prominent recent project was working alongside Balfour Beatty, providing mechanical and electrical works for the hotel component of the new £28 million Dundee train station.
The company employs a total of 99 staff; all of whom will be made redundant as part of the liquidation process.
Liquidation of the company
SEG was placed in provisional liquidation on Tuesday 29 August. The accountancy firm Johnston Carmichael was appointed as provisional liquidator.
The firm claims that SEG had faced "prolonged cash flow pressure" and the situation could not be rectified through other methods.
Companies House records show a floating charge over all the assets was given to Bibby Factors Ltd in April. In the company's abbreviated accounts for the 2016 year to June, it noted debts of £1.38 million, which rose from £836,000 in 2015. All of these are signs of a company in severe financial distress.
Liquidator, Donald McNaught, stated:
Our main objective going forward will be to preserve value in the Scottish Electric Group's remaining assets to maximise the return to creditors.
Unfortunately, the process has resulted in job losses and we will work with the relevant government agencies to ensure employees are provided with the appropriate support.
What will happen to the employees?
While the closing of SEG and redundancies were a shock to its employees, their futures look fairly positive thanks to the Scottish Government's Partnership Action for Continuing Employment (PACE) initiative.
This scheme offers free impartial advice for employees on dealing with the practical and emotional aspects of redundancy. Over 20 organisations including DWP, local authorities, Citizens Advice, and colleges and training providers, are working together to help employees explore their options and prepare for their next move.
The Scottish Business Minister, Paul Wheelhouse stated We are liaising with the liquidators, Johnston Carmichael, to provide skills development and employability support to affected employees which will include a PACE event which is being arranged for next week. Our PACE initiative has a strong track record in supporting people affected by redundancy, which I hope will be of some comfort to Scottish Electric Group employees."
Mrs Alison Henderson, the Chief Executive Officer of Dundee and Angus Chamber of Commerce, says these employees have a good chance of gaining new work, as they have many transferable skills that will appeal to other technology and construction companies.
While liquidation and redundancy are never easy, it seems that SEG employees may end up seeing positives come out of the process. However, it is unlikely that all the creditors for SEG will be paid in full due to the size of the debt.