MYCCI gets approval for CVA

Jan 29 2010 Huddersfield Daily Examiner

CREDITORS have agreed a debt repayment plan to save a Huddersfield-based business group which ran into financial trouble.

Now the Lockwood-based Mid Yorkshire Chamber of Commerce and Industry – MYCCI – is close to completing a shake-up to axe jobs and trim costs as part of efforts to put the organisation on a secure footing for the future.

The Chamber provides business representation, services, information and guidance to its members.

It gained a national reputation for its detailed economic surveys and its skills in lobbying central and local government on behalf of member firms.

But it warned before Christmas that all of its 50 employees would have to re-apply for their posts and that some jobs would be lost as a result of deep financial problems stemming from “historic debt”.

A 30-day consultation period was launched with staff at the chamber’s premises at Lockwood Park, The Elsie Whiteley Innovation Centre in Halifax and New Commerce House in Wakefield.

The move to seek a company voluntary agreement followed advice from insolvency firm Tenon Recovery in Wakefield and law firm Chadwick Lawrence with offices in Huddersfield and Wakefield.

Chamber director Andrew Choi said creditors had now approved proposals for a CVA which would see them receive 78p for every pound they are owed – considerably more than if MYCCI had been allowed to go into liquidation.

The CVA is “asset-backed” in that the chamber is selling one of its properties in Wakefield to help fund the repayments.

Under the terms of the chamber’s constitution, chamber members also had to back the CVA plan which they have done at a special meeting.

Under a CVA, unsecured creditors agree to a legally-binding agreement for the repayment of part or all of a company’s debts. The move allows the company to continue trading rather than going into liquidation.

Mr Choi said: “Having the CVA in place secures the chamber’s business going forward.”

But he added: “One of the constraints imposed is to reduce our costs to a level that will enable the arrangement to succeed, so we have been going through a process of restructuring which will be completed in a matter of a few days.”

Mr Choi said the number of job losses would be announced after the shake-up was complete, but said the chamber had already sold a nursery in Barnsley and closed a loss-making nursery in Wakefield in the run-up to the CVA being put in place.

Mr Choi said the chamber’s board had “assumed the worst” when drawing up budgets for the coming year, adding: “We don’t know what the economic climate is going to do to membership numbers or what the business community’s reaction will be.”

The chamber has almost 1,000 members – but renewals are due for more than 460 firms.

Mr Choi said: “We are getting renewals, but where companies are not renewing we are getting letters saying the decision is due to economic conditions and nothing to do with the chamber’s circumstances.”

The Mid Yorkshire Chamber was formed by the merger of the Kirklees and Wakefield Chamber of Commerce and the Halifax chamber – but traces its origins to the Huddersfield Chamber of Commerce.

The chamber grew in size during the 1980s and 1990s – running a raft of publicly-funded training schemes.

But it was hit by mounting costs relating to a childcare voucher scheme for staff employed by local companies, the loss of government training contracts and the sale of its former premises at Aspley.

Now the chamber relies on three main ‘revenue streams’ – membership subscriptions, export documentation and the childcare voucher scheme.

Membership subscriptions average £240 per company a year and range from £12.99 to £24.99 a month depending on the size of business.

The chamber also provides an export documentation service – making an administrative charge to help firms complete paperwork for sending consignments abroad which generates about £30,000.