Thursday, June 30, 2016

News: Buyer found for Kiveton Park Steel

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A deal appears to be close for Kiveton Park Steel, the award-winning Rotherham-based manufacturer that entered administration at the end of 2015.

Established in 1922, the family company originally produced items used within the UK mining industry and also supplied specialised products into the defence and aircraft industries. It has developed its unique range of production equipment to ensure that the 227,881 sq ft manufacturing facility at Dog Kennel Hill in Kiveton Park is suited to supply chain requirements for critical parts within the global automotive markets, principally supplying Tier 1 and Tier 2 companies.

Phil Pierce and Ben Woolrych, partners of FRP Advisory, were appointed as administrators after the business faced unsustainable pressure on its cash-flow due to a sharp deterioration within the specialist steel market.

A prospective purchaser was selected for the historic firm by the administrators in April and now Sky News claims that Henry Dickinson, an owner of several UK industrial businesses, is close to securing a deal that is expected to save roughly 50 jobs from workforce that was over 100 before the company entered administration.

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Turnover for the year ending June 2011 was up by 50% to £27m, by June 2014 this was back down to £19.4m. For the year to June 30 2015, turnover had fallen to £16.2m and the business reported a loss of £1.3m.

Key customer supply agreements were arranged which ensured the company has sufficient funding to continue to trade until the end of June 2016 whilst the joint administrators marketed the business for sale and continued to engage with third parties who have been interested in investing in the business. Automotive suppliers, Delphi and TRW are the company's main customers.

The agreements secured jobs for the approximately 100 staff associated with the business.

A progress report from FRP Advisory states that a further three expressions of interest were received since the initial 13 reported in November. More parties have been interested in the assets of the business on a break up basis but this has not been pursued.

The administrators stated: "We have received offers from four interested parties which we have rejected because the offers were not considered to offer best value for the assets. However, we have received one offer from another interested party which is acceptable.

"The prospective purchaser has provided evidence of funding and has reached agreement with Delphi in relation to ongoing supply.

"We are not in a position to reveal the level of offer or the identity of the prospective purchaser, however, we can confirm that the prospective purchaser is an unconnected third party."

It was hoped that a deal could be completed by the end of April 2016. It was agreed that if the sale completes, the new business will take on the assets whilst the trading liabilities of the current business are settled and the company is liquidated.

If the sale falls through, the current business will be wound down and assets will be sold on a piecemeal basis.

Chartered surveyors, Walker Singleton has been engaged by the administrators and has scheduled an auction in August for Kiveton's processing facility. The company said: "The business is still trading; during this period the potential of a business sale remains. Preparation for an auction will commence once trading ceases. Further updates will be made over the forthcoming weeks."

Kiveton Park Steel website

Images: Kiveton Park Steel

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