Wed, 21 Feb 2024 | ADMINISTRATION
Administrators for Nottingham-based flexible packaging manufacturer Surepak Limited say they are hopeful of concluding a sale of the company following a strong response from interested parties. Surepak, a leading supplier of bags and pouches for leading supermarkets and an array of sectors, fell into administration earlier this month.
The company had endured a 425 per cent increase in electricity costs and the loss of two major contracts, which led to a £1 million fall in turnover. Sole director Stuart Yorston placed the business into administration following a winding-up petition served by a creditor, which was due to be heard on February 14.
Despite its struggles, the company has a strong market position, with its customers including all major UK supermarkets, and had traded successfully for more than 32 years prior to its administration.
Joint administrators Dean Nelson and Nick Lee of PKF Smith Cooper, who were appointed on February 12, say there has been a "great response from interested parties" after they began an accelerated M&A process to secure a buyer for all or part of the business.
Dean Nelson commented: "Since my appointment last week, we have had a great response from interested parties. Over the next few weeks, we will continue to work hard to assess this interest and I am very optimistic that we will secure a future for Surepak Limited and its employees.”
"I am very grateful to the company's loyal customers, suppliers and employees for their commitment at this difficult time, and expect the sales process to gather pace rapidly, so I actively encourage any potential buyers to come forward as soon as possible, to express their interest in the business and its assets."
Surepak initially served as a distributor after being established in 1991, expanding into manufacturing in 1995 before subsequently relocating to its current 45,000 sq ft facility in 2007. Its balance sheet as of December 31 2022 shows £1.48 million in fixed assets and slightly over £945,000 in current assets, with total equity of just under £771,000.
A February 28 deadline has been set for the receipt of offers for the company or its assets.
With the UK having entered a technical recession during 2023, rigorous due diligence is more vital than ever, especially for distressed transactions
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