The explosion at the Buncefield fuel depot in Hemel Hempstead created headlines around the world. The destruction to the site was total, and many buildings within the immediate vicinity were also destroyed or damaged beyond repair. It meant that many businesses were forced to find new premises, and some even had to shut down altogether. The real damage was more than merely structural; it also fatally impacted the viability of many smaller businesses in the surrounding areas.
One of those businesses impacted was PCD Products Limited. PCD had established a strong reputation originally as a manufacturer specialising in precision sheet metalwork, finishing and assembly. Over time it had evolved into the manufacture of professional audio equipment, telecommunications equipment and commercial lighting, and supplying in to those industries. It had been founded in 1982, and by 2005 it had achieved a steady rate of growth. But then disaster struck.
The explosion caused severe damage to the property and forced the company to cease trading whilst it relocated. Although the disruption was far from terminal, it was an unwelcome pressure on the business and its owners, operating in a difficult and highly competitive industry.
In 2007, the directors restructured the business to accommodate a wider share ownership, and the assets of the business were transferred into a new limited liability partnership (LLP). Unfortunately, the restructure coincided with a downturn in business and the start of the recession, and the new business began to incur losses and accrue significant debts. It also defaulted on its invoice discounting facility.
The company sought professional advice and restructured its finances and its debt, entering into a Partnership Voluntary Agreement (PVA), but the fatal blow came when one of its major customers pulled its business, leading to a dramatic fall in turnover and profitability.
With substantial debts owed to Her Majesty’s Revenue and Customs (HMRC), the business owners – in discussion with its advisors – recognised that it could not meet its repayment obligations. It sought a new injection of cash from a third party acquirer, Quadrant Ventures Limited (QVL), which stated an interest in purchasing the business and assets on a going concern basis.
As such, SFP’s Daniel and Simon Plant – both licensed members of the Insolvency Practitioners’ Association – were appointed Joint Administrators to facilitate the sale and a happy outcome. Despite all of the challenges the business had faced, it had managed to survive, principally by refusing to bury its head in the sand. The successful sale enabled the firm to continue to trade and to rescue all 24 jobs as Daniel Plant concludes: “The sale has meant PCD is able to continue to provide excellent quality products to its customers, while keeping the existing workforce gainfully employed.”