Professional Services
Mazars
Full Credential Description
The manufacturing company faced significant challenges after a period of expansion, resulting in six consecutive years of losses. With an annual turnover of £25 million and over 600 employees, the company encountered a critical cash flow shortage that hindered its ability to meet payroll commitments. An urgent solution was necessary to address these financial difficulties.
To tackle the situation, the company was placed into administration. The administrators took immediate action to continue trading the business, focusing on maximizing debtor receipts and preparing the company for sale. This involved engaging with key customers and suppliers to secure financial support for ongoing operations, as no additional funding was available. The strategy included dividing the business into separate, natural parts to facilitate multiple sales, thereby enhancing the overall value of the company.
The impact of these measures was significant. The business was able to continue trading during the administration process, which was crucial given the timing just before the Christmas season, a peak period for high-street retail customers. Ultimately, the administrators successfully sold the business and certain assets, which allowed for the preservation of 95% of the staff's employment. The outcome for the secured creditor exceeded initial expectations, and the maximum prescribed part-fund was allocated to unsecured creditors, demonstrating a favorable resolution to a challenging situation.