MOTHERWELL Bridge has been sold for the third time since the business was subject to a controversial so-called revolving door receivership, which left members of the old group pension scheme facing cuts in their retirement incomes.
The company has been sold to Cape plc in a £37.7 million deal that will trigger £1m windfalls for chief executive Russell Ward and his predecessor Hugh Hayes.
Royal Bank of Scotland will net more than £1m from the sale. It comes ten years after creditors including Royal Bank and Bank of Scotland placed the then loss-making Motherwell Bridge in receivership as they tried to recover £45m debts.
Parts of the old group were bought by a new business that did not take on some of its historic liabilities, including the pension plan.
The group scheme had 2000 members at the time of the receivership but was in deficit by £11m.
While the deficit was subsequently reduced, taxpayers have been left to top up the incomes of more than 200 members of the old Motherwell Bridge Pension plan.
The sale to Cape provides further evidence of the value industry players and sophisticated investors have seen in the engineering business developed out of parts of the old Motherwell Bridge.
Cape acquired Motherwell Bridge from the Kuwait Finance House, which bought a controlling stake from JO Hambro Capital Management in June 2008.
The value of that deal was not disclosed. Mr Ward said Motherwell Bridge had repaid around £22m debt it assumed following what he described as a "largely leveraged" takeover by Kuwait Finance House.
The JO Hambro investment business had backed a management buyout led by turnaround specialist Hugh Hayes in September 2006, which valued the Motherwell Bridge business at around £15m.
The MB Aerospace business was spun off by Motherwell Bridge to a management buyout team with private equity backing in 2007.
Middlesex-based Cape has bought Motherwell Bridge for its specialist engineering expertise, which is in demand in industries like oil and gas.
Cape's chief executive Joe Oatley said: "Motherwell Bridge has tremendous expertise, reputation and brand recognition in the oil and gas storage tank market, including a market leading position in the UK and we expect to accelerate Motherwell Bridge overseas growth."
Motherwell Bridge made a £2.2m pre tax profit on sales of £35m in 2012.
A spokesman for Cape said: "There's no intention to rebrand (Motherwell Bridge) or to make any redundancies."
Motherwell Bridge has around 300 employees, including 100 based at its headquarters in the North Lanarkshire town.
The management team led by Mr Ward will stay with Motherwell Bridge.
Mr Ward, who succeeded Mr Hayes in June 2010, said: "This is an excellent deal for Motherwell Bridge. While the business has achieved good growth over the past few years, Cape's significant resources and footprint will help accelerate and realise our growth plans."
Mr Ward said the size of Cape's balance sheet should allow Motherwell Bridge to take on more work. He thinks the business could more than double in size.
After the old Motherwell Bridge was placed in receivership trustees of its pension scheme agreed to take £2.9m cash and a 24.9% holding in the reconstituted group in exchange for it being relieved of any liabilities connected with the fund.
Bank of Scotland was part of HBOS at the time of the receivership.
Following the buyout in 2006, Mr Hayes confirmed it would ensure banks would recover the debts due when the old holding company was placed in receivership.
The buyout triggered a £5m payment into the pension scheme, which sold its stake in Motherwell Bridge.
Members of the old group pension scheme qualify for help under the official Financial Assistance Scheme. This was created in 2004 to help people belonging to schemes that were underfunded when they were wound up and the employer was insolvent or no longer existed.
The FAS will generally pay up to 90% of the pension accrued by people before eligible schemes started to wind-up, subject to a cap of £32,575 a year.
Mr Ward and Mr Hayes both owned around 3% of the business sold to Cape. Royal Bank had 3.75%.