Hewlett suppliers left ‘out of pocket’ following collapse

BUSINESSES claim to have been “left out of pocket” after civil engineering firm Hewlett was bought out of administration by its management.

Alan Cooper

Leeds-based Hewlett said last week that the management buyout had saved around 300 jobs after it had been placed in the hands of administrators.

But Nigel Waldron, managing director of Yorkshire-based Power Minerals, said jobs are now at risk at his company as it is owed £200,000 by Hewlett. The £5m turnover business, which works on average net margins of 5 per cent, supplied pulverised fuel ash from Drax Power Station to Hewlett at a road project at Doncaster Carr.

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Mr Waldron said: “We took on this sale and incurred haulage costs in getting the material to site which has left the company out of pocket to the tune of around £200,000 and that’s a sum that the business simply cannot afford to lose.”

Power Minerals employs 14 staff and jobs at risk are those at its head office at Drax, near Selby, where 50 per cent of the team is based.

Meanwhile, Matthew Latter, director of family-run Sheffield firm Right Mix Concrete, claims his firm has lost out on £58,000. He said the money is owed to the the company by Hewlett after it supplied it with ready-mixed concrete, adding: “It’s disappointing in a difficult market.”

Administrator BDO says it will “continue to work to maximise recoveries for creditors”, but declined to reveal the outstanding amount owed to creditors. It previously said that Hewlett “encountered financial difficulties as a result of the challenging economic climate over the past few years”, with its turnover falling from about £62m in 2009 to about £42m in 2012.

However, managing director of Hewlett, Alan Cooper, claimed the decision by Lloyds TSB to place Hewlett in administration was “hostile”, “premature” and “not backed by the directors”.

Mr Cooper and John Duffy own Hewlett in its new form. Mr Duffy was previously its chairman and owned Hewlett before it went into administration.

A spokeswoman for Hewlett added: “The result of the decision to take the action that the bank chose meant that the business faced serious problems and a protracted process ending in liquidation could have been the alternative with the loss of many more jobs. As a team we have sought the best solution possible for the business and the employees.”

Mr Cooper said Hewlett was still profitable in 2009, 2010, 2011 and 2012.

The Hewlett spokeswoman added: “The new business relies on relationships with suppliers and we understand that as a result of the administration process there will be a loss of confidence, however we are working closely with suppliers and clients to ensure the business has the best possible platform to move forward and preserve jobs.”

A spokesman from Lloyds TSB, Hewlett’s bank at the time of administration, said it had worked with the firm’s management “to try and find a consensual solution which would put the business on a sounder financial footing”. But he said it “did not prove possible to restructure without a formal insolvency process”.

A spokeswoman from BDO added: “Due to the nature of the companies’ trade, the value of the business and assets would quickly reduce following the appointment of administrators, so it was important to act promptly.” She said BDO approached a number of prospective purchasers.