Furniture firm collapses

247 jobs lost as Havelock falls into administration for second time

Havelock Europa

The Fife company was suffering cash flow problems

Fife office and shop fitting company Havelock International has been put into administration for a second time with the loss of 247 jobs.

David Baxendale and Zelf Hussain of PwC took control of affairs at the Kirkcaldy company. Workers were given the news at a meeting on Thursday morning.

Mr Baxendale, said:  “The Company has faced a challenging trading environment for some time, and the directors have concluded that there is no longer any reasonable prospect for the company to continue to trade.

“Prior to our appointment, we explored ways that the business might continue to operate whilst a buyer was sought. However, regrettably this has not proved possible and it has therefore been necessary to make 247 employees redundant with immediate effect.

“Our priority is to ensure that all employees are assisted in processing their redundancy claims as a priority. We will be in further contact with all staff as soon as possible and will outline the support available to complete redundancy payment forms. Advice and assistance will also be available from JobCentre Plus and PACE.”

“A small number of employees have been retained to assist the joint administrators in managing the activities of the business to an orderly closure and maximising realisations for the company’s creditors. The administrators will work with employees, clients and suppliers to facilitate a smooth and effective wind-down.”

The business was bought out of administration last year and has undergone a number of changes in management.

GMB Scotland organiser Allison Cairns said: “The anger of workers at today’s announcement from Havelock is entirely justified.  

“There are serious questions to be answered as to how the company was allowed to get to this point without the workforce being warned or consulted.”

She said that a leak of the news on redundancies before the workforce were informed “is a disgrace and a grave error by the administrator, PriceWaterhouseCoopers.”

She added: “The plain fact is that this factory does not need to close.  There is a quality product here for a buyer willing to make this business work.  

“The consequences if a suitable buyer cannot be found will be simply dire for Fife, for what remains of Scottish manufacturing and worst of all for the 250 people employed here, some of whom will have worked here for a lifetime, all of whom are now faced with being left with nothing.

“GMB Scotland will do everything in our power to support and assist our members at this time.”

Ms Cairns said yesterday that she understood a cash flow problem was due to non-payment of money from a contractor at the Aberdeen conference centre. Robertson Group has denied it is the cause of Havelock’s problems.

A spokesman for Robertson told STV: “We are saddened to hear that Havelock International Ltd is again facing financial difficulties. Over the last 12 months Robertson has been supportive to both Havelock and RCapital, the current owners. 

“Robertson has been paying Havelock International on time and in line with our contractual agreement.

“The claim that we are not paying for works undertaken is incorrect, and we are currently conducting assessments for the next payment.

Commenting on Havelock’s situation, Ms Cairns said: “We believe this is a viable employer, we are told that the orders books are in good shape, but there is an immediate need for Havelock’s clients to pay their bills so it can pay this workforce and sustain the business.”

Business Minister Jamie Hepburn said: “Our immediate priority is the staff at Havelock International Ltd and we will do all we can to support them, their families and the wider community at this difficult time.

“Scottish Enterprise and partners had been working closely with Havelock International Ltd to explore all possible options, but unfortunately a positive solution could not be found to turn the company’s situation around.

“Scottish Enterprise will continue to work with all those involved to understand the potential options for the company going forward and explore all possibilities to help those workers who have been made redundant to secure alternative employment as quickly as possible. Our Partnership Action for Continuing Employment (PACE) initiative is engaged and providing assistance to affected staff.”

Shadow Scottish Secretary Lesley Laird said: “There is justifiable anger about the speed which events have unfolded as it can limit the options available to resolve the situation. Which in this case has left the employees with no warning and no pay.

“However, with a significant payment due for work on the AECC I believe further pressure could have been applied from the Scottish Government to make that happen or indeed to reach a resolution that would have ensured that the workforce would have been paid.”

Havelock International was previously known as Havelock Europa which was listed on the stock market but was sold through a pre-pack administration process last year to a new firm established by turnaround specialist Rcapital.

In February the company introduced a four-day week.

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