Based near Birmingham this business had been very successful before Asian manufacturers started to undercut their prices. The owners had invested monies in this business to restructure to lean manufacturing and the facilities were world class. Then, the eye went of the ball. A bad debt here, a lost contract there and the board playing with other businesses led to a situation where the company ran out of rope.
Our West Midlands colleague Gordon Boden knew the MD and was asked to put together a report on the options, CVA, Administration, Trade Sale and so forth were all considered. Keith Steven was brought in for a second opinion. Keith has seen hundreds of engineering companies and this one was clearly well run in the past.
Now it need to suspend debt, get rid of costs but most importantly win back the trust of its customer and market for new ones.
The owners were also exploring exiting the business and we set out a plan that would save the company and allow an orderly transition to new owners. Oh and finally their steel supplier was the ONLY supplier of their steel in Europe!
• Talked to board and owners about their long term game plan,
• Set up a plan to contain creditor pressure through a CVA
• Sold off some of the property
• Cut around 20% of the workforce
• Met with the German steel supplier and persuaded them to roll more steel on pro forma terms
• Met Lloyds TSB and gained their support for the plan.
• Got approval of the CVA with 99% acceptance
• Advised the company's members on the trade sale some 6 months after the rescue
Now the business is still performing well under the ownership of a London based investor and we understand has grown back to around 6m sales.
Another great job by KSA!
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.