Offshore services group sells off going concerns

TROUBLED offshore services group Cosalt has asked its banks to appoint administrators after failing to attract alternative sources of funding.

The Grimsby-based company said that no employees, customers or suppliers are expected to be affected and all the subsidiaries should continue to trade as normal.

The administrators will try to sell the company’s assets – including the shares in Cosalt Offshore and Cosalt Workwear – in order to minimise losses.

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The group has agreed to sell Cosalt Offshore to Dunwilco and said the business will continue to trade as normal and all employee, customer and supplier contracts will remain in force.

It added that the Cosalt Workwear business will be unaffected and will not be put into any insolvency process.

Instead, the administrators will look to sell the workwear business – and, consequently, no employees, customers or suppliers should be affected.

However, shareholders are not expected to get anything from the disposals.

The company’s shares have been suspended since May 1.

The administrators are expected to ask the UK Listing Authority to cancel the company’s ordinary shares of 1p each from admission to the official list.

Last week, the group warned it was likely to enter insolvency proceedings later this month if it could not reach an agreement with its banks.

The company said then it was in discussions with potential fundraisers, but no alternative sources of funding were available.

It added that if banking conditions could not be met and the banks would not agree an alternative course of action, “the directors consider that Cosalt would be likely to enter insolvency proceedings on or before February 28”.

Cosalt said the disposal of the businesses as going concerns is the best way to ensure their long-term future, safeguarding jobs, and ensuring continuity of service.

The group’s lenders include its chairman, Carphone Warehouse co-founder David Ross.