Based near Basildon this was a subsidiary of a German company. The MD saw huge problems ahead and despite being a Sunderland fan we spoke to him!
The company had been reliant upon Ford as its major customer and then expanded very rapidly with state of the art engineering/design facilities. They employed 120 engineers and then invested further in software. Ford then had a global cost cutting exercise and sales fell from £7.8m to £3m!
The German parent was keen to restructure it without a formal insolvency like administration but was also aware that it could not provide any more financial support (it was in for c. £3m already).
Initially we did recommend the CVA as the control technique to lead the restructure, but the board insisted on an informal time to pay deal with the PAYE/VAT and rates authority. We did this and got approval to pay the tax debts over 12 months.
The sale fell again. We then insisted that the CVA was the correct control tool. But the building was like the Marie Celeste and they needed to sub let 20,000 sq ft to exit the property. This was achieved with our guidance and the power of the CVA which was approved in July 2004. Our colleagues in our Stansted office have been providing hands on management accounting and outsourced Quasi finance director roles.
In 2006 the German owners wanted to exits the CVA and a deal was proposed to pay 30p in £1 immediately to exit - the original deal was 34p in £1. The creditors agreed to end the CVA and the company has now satisfied the CVA and is very profitable.
So another great job by KSA Group!
THINK THIS INNOVATIVE TURNAROUND APPROACH COULD BE A USEFUL TOOL TO HELP SAVE YOUR BUSINESS? THEN YOU NEED TO TALK TO US NOW.
CALL 0800 9700 539 AND ASK FOR IAIN CAMPBELL OR KEITH STEVEN.