OVER 300 jobs at troubled manufacturing firm Havelock Europa have been saved after the business was bought out of administration by private equity turnaround specialist Rcapital.
The deal, which was put together by joint administrators Toby Underwood and Graham Frost of PwC, has seen the London-based investor buy Havelock in its entirety, with the business being renamed Havelock International.
Shaun Ormrod, who was brought in as chief executive of Havelock at the end of last year, will remain at the new firm.
Read more: Havelock gets two years to stage recovery after tough year
Conceding that the past few months had been “a very difficult period for employees, customers and our supply chain”, Mr Ormrod said that the sale “provides an opportunity for Rcapital to support the management team to implement its turnaround plan”.
“With the ongoing support of our workforce, customers and suppliers I am looking forward to Havelock becoming a profitable, secure business with long-term growth prospects,” he added.
Read more: Havelock Europa suspends shares
The news comes after AIM-listed Havelock suspended its shares from trading last week and on Friday announced its attention to appoint an administrator.
The business, which was founded in 1869, has struggled financially since losing a major contract from a banking client - believed to be Lloyds Banking Group - in 2015.
Having previously retained Havelock for its branch refurbishment work, the bank pulled the plug on those contracts as part of a strategic shift that saw it place a greater emphasis on its online operations.
Havelock’s accounts reveal how big a loss it was to the firm, with the one client contributing £21.1m of the firm’s £70.3m turnover in 2015 alone. After terminating the bulk of its contracts the client accounted for just £1.4m of Havelock Europa’s 2016 turnover of £60.8m.
Read more: More than 300 jobs at risk as Fife firm prepares to go into administration
In the wake of losing the client, Havelock Europa reduced its workforce by more than 100, with its headcount going from 522 in 2015 to 414 in 2016. This cut its annual wage bill from £16m to £12m.
In its latest financial results, which were released at the end of May after a four-week delay, the firm reported that its turnover fell by 12.5% to £53.2m in the year to December 2017 while it went from making a marginal pre-tax profit of £200,000 to posting a loss of £5.3 million.
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