The reasons why cracks started to appear and Facade & Glazing Solutions UK Ltd (FGS) ceased to trade have been revealed by the administrators.
Problems with major projects caused cashflow issues, and when a lending facility expired, the Rotherham-based firm went into administration at the start of 2020.
Employing around 200 staff and originally part of a large French multinational company, it rebranded from Sologlas in 2012 and brought together three separate operating divisions into its 65,000 sq ft premises at Manvers in Rotherham in 2011. In 2018, CoBe Capital, acquired the Glassolutions Installation business of the Saint-Gobain Group.
Anthony Barrell and Rajnesh Mittal of FRP Advisory LLP, were appointed as joint administrators on January 6. In their documents filed with Companies House it shows that following the 2018 acquisition, the management reviewed the trading activities of the business and decided to close the insurance arm and the regional projects business based in the south.
The documents state: “However, despite the refocus of trading activities, the company continued to experience cashflow pressure primarily due to: delays and issues with major projects acquired from Saint Gobain Glass, together with new major projects taken on by the company resulting in reduced profit margins; reducing major project work as the company did not win new tenders; increasing creditor pressure given it was a new company.”
The cash position worsened and directors sought funding but none could be secured. In October 2019, Vanadium, a connected party set up by the ultimate owners to lend funds, provided a £1.5m working capital loan. Despite the new funding, the company continued to suffer cashflow pressures.
A turnaround plan was devised but it was apparent that the company would still be loss making, even with the loan and a radical plan to cut costs and make a number of redundancies.
Workers found out over the Christmas shutdown that the firm would be going into administration. Most employees were made redundant.
At the start of February it was announced that Alucraft Systems, Ireland’s leading designer, manufacturer and installer of architectural glazing systems, had acquired certain assets including the fabrication facility in Rotherham. The documents show that a deal worth £250,000 secured the regional projects, and repairs and maintenance divisions.
The major projects division was not acquired and leaves the administrators with a number of challenging contracts.
With assets available of just under £4m and creditors owed some £9.5m, many will be left out of pocket. Unsecured creditors totalled £6.7m and redundancy pay totalled £2.4m.
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