Restructure of UK and International Logistics Business

Restructure & Sale


by Graham Randall

A Southern based logistics business were making heavy losses due to high operating costs and fixed price contracts. Despite overhead savings being made, the company revenue dipped below forecast and the business incurred a new debt to HMRC. Consequently, the business entered Administration with liabilities of £2M.

Background

A Southern based logistics business with high operating costs and fixed price contracts.

Issue

The business were making heavy losses due to the high operating costs and fixed price contracts. Despite overhead savings being made, the company revenue dipped below forecast and the business incurred a new debt to HMRC. Consequently, the business entered Administration with liabilities of £2M.

Outcome

We initially engaged with the company to deal with HMRC liability and TTP in default, leading on to more formal restructuring options within a limited timeframe. We filed a Notice of Intention to protect the company and proposed a CVA (Company Voluntary Agreement) which was agreed with creditors. 

Issues with the company’s ‘O’ Licence (operator’s licence – the legal authority needed to operate goods vehicles in Great Britain) were resolved. We also instructed specialists to advise on asset values whilst evaluating the collectability of the sales ledger prior to agreeing and implementing a strategy with the company’s bank.

We approached approximately six potential acquirers and entered into a brief exclusivity period with a competitor business. The acquiring party already operated a niche logistics operation in the UK with the target company discovering synergies that they can further leverage. As a result of the sale successfully completing, all jobs within the company were saved and the Lender extended facilities to the newly merged business.

 


Specialisms