Fri, 20 Jun 2025 | BUSINESS SALE
Armson Engineering, a pipe and steelwork fabricator in Northumberland, has been acquired out of administration. The West Sleekburn-based company, which was founded five years ago, specialised in the fabrication and maintenance of steelwork, pipework and mechanical plant equipment.
The company had recently run into financial challenges, suffering from cashflow issues and a significant debt owed to HMRC. Additionally, it had experienced challenges with a large contract and a provider of invoice financing.
Armson reportedly owed close to £850,000 to HMRC and, despite efforts to broker a deal, officials filed a winding-up petition against the firm. Andrew Haslam and Shaun Hudson from FRP Advisory were subsequently appointed as joint administrators on June 10.
Following a marketing campaign, the assets and intellectual property of the company were sold to BKA Engineering for £40,000. The move secures all 31 jobs at the company, with Armson director Karen Armstrong, now a director at BKA Engineering, taking control of the business.
A report on the administration indicated that an initial one-year plan has been outlined to attempt to reach profitability. New financial controls and oversight are also set to be put in place at BKA Engineering.
According to reports, contracts the company had been working on at the time it entered administration will be continued unhindered, which administrators said would benefit the firm’s creditors.
Creditor claims against the firm totalled more than £1.76 million, including more than £760,000 owed to company owner Thomas Armstrong. The firm’s net liabilities stood at £1.56 million.
A report from David Newman at Pre Pack Pool, an independent group of businesspeople established to assess pre-pack sales to connected parties, stated that the company had been “growing revenues consistently" but had "struggled to break into profitability even with a focus on costs and customer selection and has struggled to fund the debtor ledger in recent times.”
"Due to unpaid taxes and not being able to adhere to a time to pay arrangement, HMRC has petitioned to wind the company up on April 25, 2025 with a court hearing due in early June, although they agreed to delay publishing this to allow a marketing process to try to sell the company and/or its assets to take place. "
The report added: "The larger benefit to the transaction is both the mitigation of employee claims and improved debtor realisations given the continuation of trade which is evidenced by the draft estimated outcome statement prepared by FRP Advisory."
The company’s preferential creditors are expected to be paid in full and secondary preferential creditors are set to receive a dividend. Unsecured creditors, however, are not expected to receive a distribution.
Find out more about the rules governing pre-pack sales to connected parties
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