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Maydown was sold for £1.6m in bid to secure long-term survival

By John Mulgrew

Published 31/08/2015

A detailed report from administrators Duff & Phelps shows the firm had debts of more than £1.6m to unsecured creditors
A detailed report from administrators Duff & Phelps shows the firm had debts of more than £1.6m to unsecured creditors

Londonderry firm Maydown Precision Engineering was sold off in a pre-pack administration to Waterford firm Schivo for £1.6m, a new report has shown.

The company was acquired by Schivo last month after entering administration.

It employed 133 staff and will continue to be based at its Maydown manufacturing facility.

But some 15 staff have already been let go by the firm following the pre-pack takeover.

Now, a detailed report from administrators Duff & Phelps shows the firm had debts of more than £1.6m to unsecured creditors.

After an acquisition and refinancing arrangements in 2014, the firm immediately encountered working capital issues.

That restricted cashflow impacted on the availability of investment funding, the report said.

Despite refinancing and an additional "inflow of funds", Maydown continued to experience cashflow issues, and had explored the idea of getting additional "third-party finance". But following advice from Duff & Phelps, the company's directors concluded the only way for the business to survive in the long term was "through a sale to a purchaser with a strong balance sheet and with sufficient cash reserves".

Following a lengthy process, Duff & Phelps was appointed as administrators on July 21, with the sale to Schivo shortly after the appointment on the same date.

Maydown was sold to Schivo for £1.59m.

The report also shows that Maydown received a loan of £450,000 from Invest NI in 2013 in order to attempt to mitigate the cashflow requirements.

There are still concerns over Maydown's remaining workforce, according to Davy Thompson of the Unite union.

"There are fears among the workforce that the 15 job losses announced so far may increase substantially into the future," he said.

According to Maydown's accounts ending March 31, the firm posted profits of £144,500 before tax, and turned over £6.5m. But draft accounts for the last financial year show profits fell to £91,000.

Last week, the Unite union held protests at both Maydown's Derry site and Schivo's Waterford base, and officials called for a meeting with the firm's chief executive to discuss its concerns for the staff.

It had previously claimed that the entire workforce could be affected, but Schivo said that was inaccurate and additional jobs and the site itself were not at risk.

Belfast Telegraph

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