The case began last October when Baker Tilly partners Bruce Mackay and Stephen Quinn were appointed administrative receivers to the Quartic Motor Group. The company ran into trouble after expanding too rapidly, borrowing too much money and neglecting the network. To add to those problems, car dealerships have been under pressure to lower car prices.
Between 1996 and 2002, Quartic’s turnover grew from £100m to £240m, largely by acquisition. By the time it went into administration, the company was so large it was divided into three distinct trading sub-groups, Atlantic Ford in the Northwest, Heartlands Ford in the Midlands and Brunel Ford in Southwest Bristol.
Bruce Mackay explained: ‘The acquisitions were funded largely with borrowed money. Quartic was indebted to the point where it was over-trading. And it could not generate enough working capital to run the business.’
Mackay said the company had difficulties keeping up with its network: ‘Growing rapidly, perhaps Quartic paid too little attention to its infrastructure for it to hang as a large group.’
Although the Baker Tilly team anticipated a quick sale, the difficulty came in trying to sell it as a going concern. Mackay said that there was considerable interest in the entities, but only one offer for the whole business. And when the deal was almost complete, the buyer withdrew the offer.
Then followed a last-minute reprieve. The offer was from Ford itself by its newly-formed subsidiary, Ford Retail UK, which offered to buy the business as a whole.
Some dealers believe the offer will create unfair competition as they cannot compete against a dealership owned by suppliers. Others believe the dealerships do not pose a threat, as the subsidiary will not receive any special treatment.
Neither Ford nor the administrators were able to comment on the effect the deal will have on the market.
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