Friday, July 1, 2016

News: Kiveton Park Steel out of administration

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The new owner of Kiveton Park Steel is looking ahead to a brighter future at the award-winning Rotherham-based manufacturer, now that the uncertainty around being in administration has been lifted.

Henry Dickinson, the owner of several UK industrial businesses, concluded a deal to buy the business this week which allows for the business to continue to trade as Kiveton Park Steel from the same 15 acre premises Dog Kennel Hill in Kiveton Park and secures job opportunities for around 50 staff under new ownership. It follows nine months of continuous trading in administration which had provided ongoing work for 100 staff during one of the most turbulent periods of recent history for the UK steel industry.

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 is very widely regarded around the world as producing the highest quality cold drawn steel bar, used in a variety of technically demanding applications in the automotive, aerospace and high-end engineering industries.

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

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Key customer supply agreements were arranged which ensured the company had sufficient funding to continue to trade until the end of June 2016 whilst the joint administrators marketed the business for sale. FRP Advisory negotiated with a total of 16 different parties interested in the business and assets, resulting in a number of competing offers out of which the offer from Mr Dickinson provided the best long-term solution for the business' on-going trading and assets, its long term loyal customers, staff and the company's creditors.

Henry Dickinson, owner of Kiveton Park Steel, was grateful for the support from key customers such as Delphi Automotive and added: "I would like to acknowledge the support of Sheffield City Region in offering the business significant grant funding under the Business Investment Finance initiative, which helped enable the acquisition to take place, and the constructive approach taken by Community Union and employee representatives in these challenging circumstances.

"Approximately 50 of the 100 jobs will be safeguarded. As many customers have been lost during the Administration process due to fears the business would be closed, a significant number of redundancies are required to allow the business to trade on an even keel."

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Phil Pierce, partner at FRP Advisory and joint administrator, said: "The sale is a great result not just for Kiveton Park Steel, Sheffield and the wider Yorkshire economy, is also encouraging for the steel industry across the UK which continues to meet the challenge of global competition.

"Amid the wider acute political uncertainty around the UK's relationship with the EU, the sale to Mr Dickinson may provide a signal of confidence in the regional economy which will be welcome to the people of Sheffield and South Yorkshire.

"We are grateful to the support of Kiveton Park Steel's customers throughout this long process, which allowed the administrators the time to secure the best possible long term outcome for the ongoing business while ensuring 100 staff were kept in work both through the critical three month period up to Christmas last year and then another six months this year.

"We would particularly like to thank all staff for their dedication and loyalty, helping the business to continue to deliver the quality products its customers have come to expect. We wish all those involved with the on-going business the very best for the future under the new ownership of British manufacturing and engineering owner-operator Henry Dickinson."

The transaction has been supported by ABN AMRO Commercial Finance. Its comprehensive asset based lending package provides acquisition funding for the deal and growth finance for the business.

ABN AMRO Commercial Finance was advised by Dean Gormley, banking & finance partner at Irwin Mitchell.

James Elliott, business development manager at ABN AMRO, said: "The UK steel industry continues to face some very tough trading conditions and this rescue deal therefore provides some much needed positivity for the sector. Henry Dickinson is looking to take the business forward and is confident that Kiveton Park Steel, with its processing capability and loyal customer base, has a viable future."

Kiveton Park Steel website

Images: Walker Singleton

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