B3 Cables 'owed millions' before administration
KPMG were appointed to organise the administration process for B3 Industries earlier this year in order to deal with the operations of the business and its subsidiaries, Manchester Cables, FTTX, B3 Cables and Tri-Wire.
Tri-Wire's business and assets were sold in a pre-packaged deal to local company Anglia Metal for £1.15 million. However, KPMG faced difficulties with some of the process as it was revealed that the business had “suffered significant pressure on its cash flows”.
A report from the administrators noted: “The manufacturing facilities of both Manchester Cables and B3 Spain had been operating significantly below capacity, which had arisen from declining sales. This resulted in the high fixed overhead base becoming a drain on the group cash flow.”
Credit provider PNC Financial Services introduced KPMG to the group in November of last year in order to conduct a cash flow review just after B3 requested additional funding. KPMG states that it was later asked in February of 2012 to review a turnaround plan which required additional funding that existing backers were unable to provide.
Unfortunately no third party investment was found and although a number of potential investors showed initial interest, B3 Industries was eventually pushed into administration at a time when it owed £30.8 million to PNC, which was secured against assets with a net book value of around £60 million.
Manchester Cables remains on the market while the other divisions of the company are either unsuitable for sale or have already been passed on.
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