Fri, 05 Jul 2024 | ADMINISTRATION
Administrators have been appointed at a heat exchange and boiler specialist after the majority of the company was acquired as a going concern. Substantially the whole of Heat Exchange Group Services Limited’s business and assets were acquired by a third party on June 27.
The company had around 35 employees, with the majority of jobs preserved in the sale of the business and assets to HEGS PHE Limited. Following the sale, Tyrone Courtman and Deviesh Raikundalia of RSM UK Restructuring Advisory LLP were appointed as joint administrators of Heat Exchange Group Services on July 2.
The company was part of the Heat Exchange Group, a UK and international supplier of heat exchanger and industrial/marine boiler products and services located in Wakefield and Prudhoe, Northumberland.
Joint administrator and RSM UK partner Tyrone Courtman said that Heat Exchange Group Services had recently faced “trading challenges due to difficulties associated with one of its major contracts”. Courtman continued that, despite Heat Exchange Group management seeking to divest their interest in the business “as part of a wider group rationalisation”, the contract frustrated the sale process.
He added: "After several attempts to resolve this contract, it became clear that HEGS PHE Ltd would consider involvement only through acquisition of substantially the whole of the company's business and assets as a going concern.”
"Following the sale, given the company's underlying precarious financial position, management had little alternative but to instigate a formal insolvency procedure and appoint joint administrators, and we will be looking to realise the company's remaining assets if feasible."
In its most recent accounts, for the year ending June 30 2023, Heat Exchange Group Services reported turnover of slightly over £5 million, up from £4.3 million a year earlier, while its post-tax profits increased from £26,557 to £41,491.
At the time, its fixed assets were valued at £230,703 and current assets at £2.1 million, with net assets amounting to £509,207.
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