Nearly 400 jobs have been saved with the rescue of Metalrax, one of the West Midlands’ best known industrial names, following its sudden collapse.
AIM-listed Metalrax Group Plc, and subsidiaries Metalrax Engineering Support Services Limited, Metalrax Specialist Applications Limited and Down & Francis Industrial Products had all been placed in administration.
Joint administrators Will Wright and Mark Orton from KPMG sold the Alvechurch-based business and assets of the niche engineering group to a group of companies headed by Bowman Birmingham Limited.
The group will now trade as Arc Specialist Engineering and is backed by specialist private investors who have announced a ‘significant’ investment programme in the company.
In addition, as part of the transaction, solvent share deals were completed for two companies within the Group, both of which were not affected by the insolvency process – Metalrax Housewares Limited, which was sold to Cable Capital Partners Limited and Metalrax Overseas Holdings Limited, which was also sold to Arc Specialist Engineering.
The combined transactions will secure a total of 387 jobs.
Will Wright, joint administrator from KPMG, said: “The Group has experienced difficult trading conditions for some time, primarily within their consumer durables division.
“While the Group’s management team has divested in recent years to focus upon niche areas, trading in this division has led to a significant drain on the Group’s financial situation.
“Being able to sell the business and assets, together with shares in solvent businesses within the Group, has been a great solution to securing a future for the business and more importantly just under 400 jobs.”
In 2009 Metalrax announced a refinancing deal after chief executive Andrew Richardson had previously warned it would have been ‘unable to continue as a going concern’ without new banking facilities.