What is Company Administration (video)

A bespoke precision engineering business, working predominantly in the automotive and aeronautical sectors, found itself experiencing cashflow difficulties caused by an increase in costs due to the uncertainties surrounding Brexit, and the loss of a key member of the sales team.

When the company’s largest customer reduced its spending by 50%, the director felt the business couldn’t continue and sought advice from the team at Wilson Field.

Wilson Field marketed the business and assets for sale, and a sale of the tangible assets was completed immediately following the administrators appointment, to an unconnected third party.

Kelly Burton, insolvency practitioner and director at Wilson Field, said:

“With so many complications surrounding Brexit, coupled with the loss of some key staff, the company experienced some cashflow difficulties it could not get out of.

There was a positive outcome in the end as some of the tangible assets within the company were sold, which meant a good return for creditors.”

Machining engineers Oldham Precision has been bought out of administration saving all 12 jobs.

The company’s principal activity was the sub-contracting manufacture of large volume batch precision machined components for clients across a wide range of industries including aerospace, paper converting, printing, coatings, electronics and valve construction.

Administrators Kelly Burton and Lisa Hogg from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 17 January after the company suffered cash flow problems.

Originally established in 1982, the company, based at Red Rose Business Park on Shaw Rd in Royton, offered subcontract engineering including CNC milling, grinding and turning.

After advice from Wilson Field, the business was sold to the existing management team as a going concern saving all 12 employees’ jobs.

Kelly Burton, director in the Leeds office at Wilson Field said;

“Following discussions with the director, the business was sold as a going concern, safeguarding all 12 employees’ jobs and offering a better return for the company’s creditors than alternative options.

“The new company will be under the same management offering the same standards of service to its customers.”

A Chesterfield machine tool manufacturer, which supplies to the global automotive industry, has been bought out of administration by sister-company, Peak Toolmakers (Assets) Ltd and managed by two of its current directors, saving all 46 jobs.

Peak Toolmakers Limited, based on Chesterfield Trading Centre on Smeckley Wood Close, had enjoyed a profitable trading history since 2004 and had significantly grown to become a recognised name in the sector.

However, a lack of working capital following a combination of factors together with a number of loss-making contracts with principal customers, competition from overseas, namely the Far East, undercutting prices, and extremely fast and tight timescales to allow its customers to meet contractual supply arrangements, had caused recent cash flow problems.

Insolvency practitioners Joanne Wright and Lisa Hogg from Wilson Field were appointed Administrators on 2 September 2015 to handle the sale out of administration.

The business and assets bought by Peak Toolmakers (Assets) Ltd managed by two of the existing directors, Geoff Bacon and John Buxton.

Joanne Wright from Wilson Field, said:

“Peak Toolmakers Limited had experienced financial difficulties after seeing a drop in demand from a major customer, a loss of more than £500,000 on a contract and was being threatened by enforcement action from HMRC due to arrears.

“The pre-pack deal has meant all 46 employees’ jobs have been saved and ensures a continuity of trading under new ownership.

“We are delighted to have secured a swift sale of this established Chesterfield-based manufacturing business to deliver the best long term solution for the business ensuring it can continue to serve its established customer base.”

Peak Toolmakers Limited’s main business was the production of mould tooling, jigs and fixtures and robot heads which were used in the injection moulding and die casting industries, principally the automotive industry, for internal and external trims together with under bonnet components.

Its customers produce products for a range of automotive manufacturers including Jaguar Land Rover, Nissan, Toyota, BMW and similar manufacturers.

Director Geoff Bacon said:

“Having gone through difficult times, we are very happy to have secured the loyal service of our staff through the help of Wilson Field.”

Wilson Field worked closely with solicitor Neil Kelly from MD Law in Sheffield and valuer and asset management consultant David Smith of Charterfields.