Power Transmission Supplier: Leamington Spa
Small and medium sized, SME, businesses are being starved of credit and the cost of credit is also worsening, with average rates on new debit rising from 2.56 percent to 2.73 percent. This is despite the latest economic figures indicating that the economy is recovering. Bank lending to SMEs dropped by £1.4 million in the last quarter – lending to SMEs has contracted for eight of the past 10 months.
These tightening credit conditions for SMEs are hindering recovery, which is precisely what happened to Powerdrive PSR. This Leamington Spa-based power transmission Manufacturer Company was hit hardest when orders were continuously delayed and suppliers demanded proforma payments leading to cash flow problems. After accruing debts of almost £1.7 million, the company was placed into administration.
The nationwide insolvency practitioners SFP’s Simon Plant and Daniel Plant – both licensed members of the Insolvency Practitioners’ Association – were appointed Joint Administrators on 23rd September 2013 to complete the sale.
Established in 1977, Powerdrive PSR has operated for over 37 years providing an excellent customer experience with the optimum solution to problem solving in the Power Transmission Market. Based in the UK, they are committed to sourcing and supplying market leading electro-mechanical, pneumatic, hydraulic and manual products. With a turnover of £1million, and employing nine people at its Sydenham Industrial Estate base, Powerdrive PSR distribute a range of leading brand power transmissions products for customers in the mining, agriculture, food, packaging, labeling and converting sectors.
“As a result of the difficult trading conditions and a reduction in work caused by a delay in orders, Powerdrive PSR entered into a Company Voluntary Arrangement (CVA) in March 2012,” says Simon Plant, one of the Joint Administrators and Group Director of SFP.
“Orders continued to be delayed and suppliers demanded proforma payments leading to cash flow problems, and along with additional liabilities that the company could not settle, the company was placed into Administration.
“The Directors wanted to continue with the business, and as they were also directors of Motionteq Limited (MTL) which could be used as a purchasing vehicle, this was an option. In order to preserve goodwill whilst this option was pursued, the company continued to trade to maintain a good relationship with its existing customers. Speed was critical, and we were able to complete the sale to MTL in 10 days and preserve the majority of jobs.”
