KPMG administrators sell Metalrax in pre-pack
Pre-pack sale of engineering company saves nearly 200 jobs after the company struggled when WM Morrisons walked away last year
KPMG ADMINISTRATORS have sold AIM-listed Metalrax through a pre-pack administration saving more than 300 jobs.
Will Wright and Mark Orton, from KPMG, were appointed joint administrators to niche engineering group Metalrax and its subsidiaries: Metalrax Engineering Support Services; Metalrax Specialist Applications; and Down & Francis Industrial Products.
The business announced on 2 April that it had suspended shares and had lined up KPMG administrators. The company blamed difficult trading conditions and the major contract loss of Morrisons walking away – the supermarket represented about 3% of annual group revenue.
Metalrax was sold to a group of companies headed by Bowman Birmingham which will trade as Arc Specialist Engineering, saving 387 jobs. It is backed by private investors. As part of the pre-pack Metalrax Housewares was sold to Cable Capital Partners.
Administrator Wright said: “The group has experienced difficult trading conditions for some time, primarily within their consumer durables division. While the group’s management team has divested in recent years to focus upon niche areas, trading in this division has led to a significant drain on the group’s financial situation.
“Being able to sell the business and assets, together with shares in solvent businesses within the group, has been a great solution to securing a future for the business and more importantly just under 400 jobs.”
According to Metalrax’s latest interim report for the 26 weeks to 1 July 2012 net debt stood at £8m, with losses after tax reaching £1.2m compared to a £100,000 profit for the same period in 2011.
A pre-pack is where the sale of a business is arranged prior to it entering administration and is sold immediately after entering into the process when administrators are appointed.