West Midland car components manufacturer Castings has made provision of more than £5.7million against money held by failed Icelandic banks.
The Brownhills-based company, an award-winning supplier to Toyota, reported in October that it had £5.7?million on deposit with Kaupthing Singer and Friedlander, Heritable and Glitnir which was due to be repaid on December 31.
Chairman Brian Cooke reported to shareholders yesterday: “It was disappointing to report that our deposits in three Icelandic banks are under threat: as yet we have little news on the eventual outcome. The deposits were made earlier in the year when our advisers rated them satisfactorily.”
Castings has made full provision against the deposits of £5.701?million and notwithstanding the risk of losing the money it has “further substantial funds available” to finance its operations, Mr Cooke said.
The company reported a profit before tax for the six months to September 30 of £521,000 compared with £6.266?million in the same period of 2007 on revenue 12 per cent up at £51.1?million.
Mr Cooke said Castings, which employs nearly 1,000 people at three sites, had put a new foundry on ice at its William Lee business at Dronfield, South Yorkshire, until conditions improve.
He said: “Up to the end of September all companies were operating well, but since the beginning of October we have seen a substantial reduction in customers’ schedules, now up to 40 per cent, in the commercial vehicle manufacturers and at a higher level in the car industry.
“As a result of these reductions and the uncertainty in the immediate future we have had to reduce the number of shifts worked and regrettably we have had no option to reduce the numbers employed.”