Wed, 01 May 2013 | ADMINISTRATION
Welsh business, Rowecord Engineering, has entered administration after the Welsh Government admitted there was nothing more it could do to save the business.
Based in Newport, the structural engineering business has struggled from a drop in orders and delayed payment on some contracts over recent months. This put a strain on cash flow and the decision was taken to put the business into administration despite the fact that it is still profitable at the moment.
A statement from Welsh business minister Edwina Hart explained that the Government had attempted to help the company, but that the business had rejected its offer of a loan. Ms Hart said: “Over the last few years the industry across the UK has been experiencing difficulties and the company’s market is believed to have reduced by up to 40 per cent. This has placed considerable financial pressure on suppliers and has resulted in competitors leaving the industry.”
She added that although the government was able to assist the firm in resolving a recent issue with contracts, “sadly these wider financial pressures and challenges in the industry have meant that the company themselves have had to take the decision to enter into administration”.
Grant Thornton has been appointed as the administrator and it is understood that it is keen to find a buyer for Rowecord Engineering.
The company had a turnover of £68 million for the year to the end of June 2012, an increase from £37.9 million the year before. It also posted a pre-tax profit of £3.18 million. However, the accounts, seen by Wales Online, showed that the firm was owed £21.03 million by its debtors.
The administrators have confirmed that 430 people are to be made redundant, while around 80 will be kept on to help oversee the administration.
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