Published On: Tue, May 7th, 2019

Protecting our sector is imperative

Derbyshire company saved after buyout’ – Derbyshire Times, ‘Thousand jobs saved at Ashfield company’ – Mansfield Chad, ‘Thousands of jobs saved after Synseal Group sold out of administration’ – Business Leader, ‘Synseal Group saved from administration’ – Factory Gate.

There is no doubt the overriding consensus regarding the news of the sale of the Synseal Group to Aperture centres on the saving of over 1,000 jobs. This was a key consideration for the joint administrators who concluded the pre-pack sale of Synseal. They were also concerned about the mass disruption a liquidation could cause, stating: “A liquidation or administration wind-down would result in the cessation of trade and cause significant disruption and financial loss to customers who are limited in their ability to resource supply. The offer from Aperture represented the best value for the assets and best return to creditors as a whole.”

Insolvency practitioners say, that despite concerns, pre-pack administrations are often the best route forward for all parties, including creditors. The case of Synseal is slightly different from many pre-packs we hear about. In many cases, the business is not properly marketed in order to maximise the return, enabling the new owners to shed some of the liabilities. It is important to emphasise that it appears every effort was made to find a buyer for Synseal at the end of last year. In fact, two parties where closing in on a purchase – so it could be concluded every effort was indeed being made to find a new owner. I understand that this case has created much emotion amongst many in the industry. Nevertheless, I think it is important to focus on the big picture. The 1,000 jobs are crucial. Safeguarding the supply of the main component for over 200 fabricators and with this, the supply of windows and doors to thousands of installers is paramount. Conversely, if 1,000 jobs had been lost, 200+ fabricators would have been unable to supply products to thousands of installers – it would have sent a dangerous message about the stability of our sector. Protecting our sector is imperative to our futures. You only have to look at how a number of high-profile failures in the retail sector have sent it into a downward spiral. However, what you won’t find is the sector turning on itself. John Lewis didn’t turn on the pre-packed House of Fraser, as it knew it is better to have strength in numbers to protect its sector. Finance providers are also very eagle eyed when it comes to business failures in a sector. The loss of a heavyweight like Synseal would have had a detrimental effect on the sector’s credit rating and availability of credit to companies within it. I do fully appreciate there will be pain felt by a number of creditors, but it could have been much worse for so many if Synseal hadn’t been purchased by Aperture.

John CowieEditor