Mon, 07 Mar 2011 | ADMINISTRATION
Electric delivery van manufacturer Modec Limited has entered administration with £40 million of debt.
Administrators Ryan Grant, Simon Appell and Anne O’Keefe at Zolfo Cooper made 26 out of 53 employees redundant on appointment. The remaining 27 staff members are to continue in their normal roles at the business.
Modec is “a market leader in its field, and as such it represents an attractive purchase for the right buyer”, the administrators said.
Cash flow difficulties have been blamed as the main reason for Modec entering administration.
In 2009, Modec won a £23 million grant from the US government to make electric vans with US company Navistar. The flow of secured orders has been significantly less than anticipated, however.
Lord Borwick founded Modec in 2004 and set up a factory in Coventry to build the Modec, which is similar in size to a Ford Transit.
Despite initial plans to boost production to 2,000 vehicles each year, only 400 have been sold so far, 150 of those to customers in the UK. In 2007, Tesco acquired 15 of the first vans to come off the production line, but did not order any more. UPS and FedEx have also bought Modec vans.
Modec’s takings jumped from £2.41 million for the year to 31 December 2008 to £9.34 million for the subsequent year. Its 2009 losses stood at £5.9 million.
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