Tue, 19 Jan 2021 | BUSINESS SALE
Conwy-based injection moulding company A2B Plastics Limited has been sold by administrators to Cygnet Plastics Ltd, a newco set up by two employees.
Despite successfully entering a CVA in March last year, the company fell into administration in November 2020 after being unable to fulfil the terms of the agreement during the COVID-19 pandemic, putting 24 jobs at risk.
David Kemp and Richard Hunt of insolvency practitioner SFP were appointed joint administrators in November and assisted in completing the sale to Cygnet Plastics Ltd, formed by A2B employees Duane Jones and Joe Lui.
A2B dates back to 1958 and specialises in manufacturing bespoke plastic products for the automotive, electrical, medical and packaging industries. Its public sector clients include the Ministry of Defence. The company operates from a 22,000 sq. ft. premises in Mochdre, Conwy.
The company initially ran into financial difficulties as a result of Brexit and the loss of a major client, leading to the CVA, before its business was further undermined by the COVID-19 pandemic.
New co-owner Duane Jones commented: “Taking on any business is always a risk but I knew this was a viable business. It is good saving the jobs of the people I have worked with for years but we are also ambitious about Cygnet.”
Joint administrator David Kemp added: “In such challenging times it was extremely pleasing to achieve a sale of the business and safeguard so many jobs. The purchaser of the business will remain in the trading premises while discussions continue regarding a sale of the Company’s interest in the unit.”
“Brexit and the pandemic have caused immense difficulties for many businesses, but by seeking specialist guidance early we were not only able to protect jobs, but also to preserve the expertise of this specialist company and maximise the position for creditors too.”
In its most recent financial reports, for the year ended March 31 2019, A2B Plastics reported fixed assets of £1.1 million and current assets of £717,002. At the time, the company owed £684,622 to creditors within one year, with £811,963 due after more than a year. Net assets stood at £344,889.
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