Fri, 27 Oct 2023 | ADMINISTRATION
Bonar Yarns, a manufacturing business based in Dundee, has gone into liquidation after efforts by a US businessman to save the company failed. Interpath Advisory’s Blair Nimmo and Geoff Jacobs have been appointed as joint provisional liquidators of Newman Bonar, a new business set up by US businessman John Newman – owner of synthetic sports turf distributor Elite Turf USA – to save Bonar Yarns earlier this year.
Bonar Yarns, which can trace its history back 120 years, fell into administration earlier this year as a result of “unsustainable cash flow issues”. The company, which was acquired in an MBO in 2020, had been impacted by COVID-19 and global macro-environment headwinds that affected demand for its products.
Michelle Elliot and Callum Carmichael of FRP Advisory were appointed as joint administrators and began seeking a buyer for the firm. The company was subsequently acquired by John Newman through Newman Bonar, with Newman providing “significant funding” to maintain operations while seeking formal contracts with existing customers as well as new supply contracts. Under Newman’s ownership, the firm focused on manufacturing materials for sports pitches.
Despite Newman’s investment, however, the company continued to face challenges as costs (especially energy) were driven up by high inflation. The firm also faced significant ongoing overhead costs and could not re-establish sufficient contracts with key customers to make its operations viable and meet its ongoing funding requirement.
Following the appointment of provisional liquidators, the majority of the firm’s staff have been made redundant, with a small number retained to assist in an orderly winding up of the company.
Interpath Advisory Chief Executive Blair Nimmo commented: “This has been a well-known Dundee business for many years with a strong global reach and it is extremely disappointing for the company’s many stakeholders, funders and employees that it could not continue to trade viably.”
Interpath Managing Director Geoff Jacobs added: "Our focus will be on supporting the employees affected, and securing and realising the assets of the company which primarily comprise its name, customer base, stock and plant and machinery. Clearly it would be great to see the business continue in some manner and therefore, if any party has an interest in acquiring the business and/or its assets, they should contact the joint provisional liquidators as soon as possible.”
Bonar Yarns reported turnover of £6.7 million in its most recent accounts, covering the year ending November 30 2022. At the time, the company’s fixed assets were valued at £1.6 million and current assets at £5.5 million, while net assets amounted to slightly over £3 million.
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