West of Scotland Heavy Haulage Limited has made the majority of its employees redundant after moving into administration this week.
This makes it the latest in a string of companies in the renewable energy sector to succumb to administration or liquidation in the past year.
Who is West of Scotland Heavy Haulage?
West of Scotland Heavy Haulage was founded in 1946. They operated one of Scotland’s largest fleets of specialist haulage trucks, trailers and low loaders.
Based in Cumbernauld, North Lanarkshire, the company had several contracts in the renewable, contracting, mining, civil engineering and construction sectors. Recently, West of Scotland Heavy Haulage had become one of the leading specialists in wind turbine haulage.
And, until recent times, the company had an estimated turnover of £11 million.
Why did it go into administration?
West of Scotland Heavy Haulage, and its trading company, West of Scotland Storage Ltd, went into administration on 1 November 2017.
Tom MacLennan, one of the joint administrators and partner with FRP Advisory described administration as “the only option”.
He claimed that West of Scotland Heavy Haulage had suffered “severe operational and financial problems”. This included unsustainable cash flow, rising costs and growing competition.
Abbreviated accounts covering the 2016 year to August show that West of Scotland Heavy Haulage has a total of £538,000 in debts falling due within one year. £1.16 million in debt is due after one year has passed.
These amounts are both due “under hire purchase contracts” - a common form of credit. Until repayment is complete, the creditor remains the legal owner of the goods.
The administrators have ceased trading with immediate effect and have brought sub-contractors in to enable the completion of three main contracts.
What does this mean for its employees?
21 employees have been made redundant, while two stay on to help with the administration process.
The administrator said:
“We will work closely with all agencies, including the Redundancy Payments Office, to ensure employees receive as much support as possible at this difficult time.”
The Minister for Business, Innovation and Energy, Paul Wheelhouse, has also commented on the events. He has real concern for those affected by these developments.
The Scottish Government is monitoring the situation and is ready to provide support through its multi-agency initiative Partnership Action for Continuing Employment (PACE<g class="gr_ gr_52 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-del replaceWithoutSep" id="52" data-gr-id="52">),</g> if need be.
The initiative aims to minimise the time people affected by redundancy are out of work. The Minister hopes that PACE’s “excellent track record” will be of some comfort to those affected, and their families.
We don't expect this to be the last renewable energy firm that will fall into administration this year. Changes to the industry have almost guaranteed a loss of viability for several similar companies across the UK.
If you are concerned about insolvency or think that administration might be your only solution, talk to us