Talks under way with likely buyer
Havelock Europa shares suspended amid cash crisis
Havelock Europa is one of Fife’s biggest employers (pic: Google)
Shares in Fife interior fittings company Havelock Europa have been suspended and it is talks with a buyer after admitting it was running out of funds to support the business.
Talks with existing funders ended on Tuesday night without an agreement and it is now seeking “to protect the position of creditors”. Daily Business understands the board is negotiating to sell the 320-employee Kirkcaldy company to a turnaround specialist.
There are fears that if these discussions fail the company may be forced into administration. An announcement could come before the end of the week.
In its last annual results, published in May, the company referred to a “material uncertainty that may cast significant doubt over its ability to continue as a going concern and to realise its assets and settle its liabilities in the normal course of events”.
Chairman Ian Godden, right, who took over in January last year, said in the results statement: “2017 had proved to be a much more challenging year than expected when I became chairman.
“The recovery, which I sought to trigger, has got off to a slow start. 2017 was one of the worst performances in Havelock’s history.”
In a statement this morning the company said that since publishing its results “the company has experienced an unexpected increasing credit squeeze from its suppliers, as a result of which it has substantially utilised its available facilities following the re-financing first announced on 20 February.
“The board announces that it has been in discussions with existing funders and investors in the company regarding the provision of further funding, however it became apparent yesterday evening that these were unlikely to result in a positive outcome.
“The company needs further financing for its immediate working capital needs hence the board is obliged to consider steps to protect the position of creditors and is in discussions with potentially interested parties in this regard.
“The company’s ordinary shares will therefore be suspended from trading on AIM with immediate effect pending clarification of its financial position.”
Fife Council Co-Leaders David Ross and David Alexander, said: “This worrying announcement potentially has a major impact on Kirkcaldy and mid-Fife, as the company is the one of the area’s largest employers.
“The Council has been strongly supporting Havelock over the past year with regular officer engagement, and significant assistance from Scottish Government and Scottish Enterprise.
“This will continue as the company considers its options over the coming days, and the Head of Economy, Planning and Employability will be in daily contact with the company and the national agencies as the situation develops, to provide all possible support to the company and its workforce.”