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3 April 2013 | Anna Reynolds
Metalrax Group, which collapsed after falling sales following the loss of a major contract with supermarket Morrisons, has been sold by administrators.
The business and assets of the engineering group have been sold to a group of companies headed by manufacturer Bowman. The group will trade as Arc Specialist Engineering and is backed by private investors.
In a statement yesterday, Metalrax said it had struggled with performance in its consumer durables division since it lost a contract to supply bakeware to Morrisons in July 2012. The deal was worth approximately 3 per cent of its annual group revenue.
At the time, Metalrax chief executive Andrew Richardson said the company was disappointed to have lost such a significant customer, which it tried hard to retain.
The Birmingham-based group was placed into administration yesterday, with KPMG appointed to handle the insolvency.
Will Wright, joint administrator from KPMG, said: “The group has experienced difficult trading conditions for some time, primarily within its 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.”
As part of the transaction, deals also were completed for two companies in the group that were unaffected by the insolvency process. Metalrax Housewares was sold to private equity group Cable Finance, and Metalrax Overseas Holdings was also sold to Arc Specialist Engineering. This saved 387 jobs.
Wright added: “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.”
Morrisons declined to comment.