Pension blow sparks warning

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CASHMERE firm Dawson International warned it may be forced into administration after failing to offload its pension burden into the Pension Protection Fund.

The Scottish company, 29 per cent owned by Yorkshire textiles firm Leeds Group, said 200 jobs are at risk after it failed to persuade the pension bail-out fund and the Pensions Regulator (PR) to take on its pension liabilities, which were valued at £11.4m at the start of October.

Chairman David Bolton said it has tried to secure the best outcome for its 3,200 UK pension scheme members over the past four years, but had no alternative but to seek their entry to the PPF.

“We believe that our proposal provided significantly better, guaranteed returns than insolvency and we are surprised by the PPF’s decision,” he said.

“In the event of administration, while we would expect that a new owner would be found quickly, there remains a real risk that a successful and profitable UK heritage business will suffer from a period of uncertainty.”

Finance director Dave Cooper said Dawson has not lined up a buyer. “There’s no pre-pack in the background. If a buyer is sought it will be an entirely open process.”

He said the PPF and PR refused to take over the schemes, despite the offer of cash, a loan note and a third of the company’s equity.

“The consequence is likely to be that the plans ultimately enter the PPF, with the PPF receiving lower compensation, and furthermore approximately 200 jobs are put at risk,” said the company.

Mr Cooper said the PPF valued the deficit at more than £100m so felt the compensation offered by Dawson was insufficient compared with the size of the deficit.