Northern Ireland suppliers in fear as insolvency looms for Wrightbus
Directors tipped to appoint administrators within days
Northern Ireland suppliers owed large sums by Wrightbus are bracing themselves for a financial hit as the bus giant teeters on the brink of administration.
Directors of the Ballymena business are expected to appoint administrators this week after it failed to close a deal with potential buyers of the cash-hungry enterprise.
As well as 1,400 staff losing their jobs - which alone would make Wrightbus one of Northern Ireland's biggest corporate casualties of the last 10 years - dozens of suppliers in the Co Antrim area would be hit by the company's insolvency, causing a potentially massive ripple effect of further job losses.
Some firms are fully dependent on Wrightbus for survival.
It has bought a wide range of products and services from the area from tools to industrial supplies and cleaning, the vast majority from independent businesses.
A spokeswoman for Wrightbus, which was co-founded by Sir William Wright, said it had no update on the next steps that will be taken.
Last week it emerged that two would-be buyers including entrepreneur Jo Bamford, whose father owns machinery giant JCB, had walked away from a potential takeover.
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Reports suggest Mr Bamford had baulked at the high rent payable on Wrightbus’ premises.
One person in communication with Wrightbus said: “They’re still working very hard to see if anything can be salvaged there.”
Wrightbus has faced growing financial difficulties due to a downturn in demand in some of its major markets, prompting it to appoint business advisers Deloitte in July to help it find investors.
Now it’s likely that the directors will also appoint Deloitte administrators in a process which could see the failing parts of the business stripped away in a bid to find assets which can then be sold.
However, that will mean creditors are likely to lose out.
And it’s possible a pre-pack administration may be achieved which would involve a buyer being lined up before administrators are appointed.
With the ‘old’ business in administration, a new business would be created for purchase.
“It’s likely the case that it’s fundamentally sound but with so much complexity that it’s easier to let it go (into administration) and pick up the pieces,” one insolvency expert said.
And while Jo Bamford and another buyer — thought to be the Chinese giant Weichai — have left the stage, one observer said it could be a case of “we haven’t gone away, you know”, with some interested parties returning following administration.
But the large numbers of staff at Wrightbus are thought to be a stumbling block.
“There’s a big hole in terms of cash and there’s not enough work to look after all the staff that there are,” an observer said.
“But what they might be waiting for is for administration to push out all the liability for redundancies out and all the liability for pensions out to government bodies, and then pick it up for next to nothing.”
He added: “Why would anybody want to buy a business with about 1,400 staff knowing you’re going to have to get rid of about a third of them?”