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Deal sees 1,000 jobs saved at Heywood Williams
MORE than 1,000 jobs were saved last night after troubled building products group Heywood Williams secured a capital restructuring.
As part of the deal, the banks will write off 21m of debt in return for a major stake in the new group.
Earlier in the day, Halifax-based Heywood Williams Group was forced to appoint administrators, after shareholders rejected restructuring proposals.
The company also secured a suspension of the listing of its ordinary shares.
Following the restructuring, Robert Barr, the chief executive of Heywood Williams, said it would be "business as usual" with the same management teams in place across the group.
He added: "This restructuring secures over 1,000 jobs, protects the members of the UK pension fund, and allows Heywood Williams, our suppliers, and our customers to continue with business as normal.
"The new group has a great future ahead and we look forward to guiding it into a period of growth as our markets start to recover. The banks' support demonstrates their faith in the strength of the underlying business."
Yesterday morning, a general meeting of shareholders in Manchester had rejected a proposed rescue package that included plans for the banks to take an 80 per cent stake in a 21m debt-for-equity swap.
Two major shareholders, businessman Robin Graham and Paul Bell, had stated they would vote against the proposals before yesterday's meeting.
In a statement issued last week, Mr Graham said he would be opposing the rescue package because he wanted to see a better plan.
A Heywood Williams spokesman said: "At the meeting, the chairman called a poll to count the votes on the first resolution. After the poll, all that was announced was that the resolution was not passed – it required 75 per cent to vote in favour and Paul Bell voted his 27 per cent against. The meeting was then terminated since all the other resolutions were inter-connected."
Yesterday afternoon, Dan Butters, Bill Dawson and Neville Kahn of Deloitte were appointed as joint administrators to Heywood Williams.
Shortly afterwards, a sale contract was exchanged between the administrators, the company and a newly incorporated company, Arran Isle.
This gives the administrators the ability to implement the transfer of operations to the new group. Completion of the sale is expected to be effected within 28 days. None of the trading companies are subject to insolvency proceedings
Before, yesterday's shareholders' meeting, the company had warned that failure to approve the proposal would "immediately have material and very detrimental consequences for the group" which would destroy any share value.
Some 80 per cent of the group's sales are branded building products to customers in the home improvement and residential new build markets across Europe and North America.
Last year, the group's revenues fell by 12.5 per cent to 219m.
In August, Heywood Williams said it would continue to face "very difficult" market conditions.
In a statement issued last night, Heywood Williams said: "While the worldwide economy is starting to show signs of stabilisation, commentators expect a slow recovery over a number of years. The restructuring completed today sets Heywood Williams on track for future growth and value creation through the economic recovery and beyond."
How the new look works
Here are the key elements of the restructuring: Heywood Williams' UK banking syndicate will provide the new group with 6m of extra financing to support the growth of the business as markets start to recover.
The syndicate (Lloyds Banking Group and National Australia Bank) has agreed to write off 21m, nearly 40 per cent, of the group's existing debt, which will significantly reduce future interest payments and strengthen the balance sheet.
Heywood Williams is now backed by two major international banks, who will be the major shareholders in the new group with collectively 80 per cent of the shares. An Employee Benefit Trust will have 10 per cent of the shares and the remainder will be held by the group's executive directors.
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Wednesday 23 May 2012
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