Heywood Williams in administration but offer tabled from new group

Oct 21 2009 by Henryk Zientek, Huddersfield Daily Examiner

Heywood Williams calls in administrators

A FIRM employing more than 1,000 staff ended up in the hands of the banks today after falling into administration.

Building supplies firm Heywood Williams – founded in Huddersfield in 1890 – called in Deloitte as administrators after a rescue plan was voted down by shareholders.

But the firm’s trading subsidiaries were immediately sold out of administration to a new company, Arran Isle, which is 80% owned by Lloyds Banking Group and National Australia Bank.

The other 20% of the new firm will be split equally between the firm’s management and an employee trust.

The 11th-hour rescue bid was launched to save more than 1,000 jobs, including 384 in the UK.

On a day of high drama, the loss-making Elland-based company called in administrators and suspended its shares on the London stock market yesterday after a funding deal collapsed.

Hours later, chief executive Robert Barr announced plans for the sale of the business to Arran Isle Ltd, which will take over all the company’s operations and its 1,000-strong workforce – and a deal with its banks along the lines originally proposed.

The firm’s biggest shareholder had earlier pulled the plug on a rescue deal which would have put 80% of the firm in the hands of its bankers.

Heywood Williams needed holders of 75% of its shares to support the plan, which it unveiled earlier this month.

But major investor Paul Bell, who owns 27% of the debt-laden firm, voted against the deal.

The proposed deal involved Heywood Williams leaving the stock market as part of a debt-for-equity swap which would give its UK banking syndicate an 80% stake in exchange for wiping out £21m of debt.

That would leave a 10% shareholding for board members and some other senior managers and 10% for existing shareholders.

Mr Bell had called the terms of the deal “outrageous” and said he would “rather kiss my shareholding goodbye” than see the deal go through.

The new deal between the company, administrators and Arran Isle Ltd is expected to be completed in 28 days – with none of the firm’s trading companies subject to insolvency proceedings.

As part of the restructuring, bankers Lloyds Banking Group and National Australia Bank have agreed to write off £21m of debt – 40% of the total – in return for an 80% stake in the new group.