Francis Catering and Design Catering Equipment have been sold out of administration to manufacturing group Unitech Industries for £88,000.
Steven Stokes and Raj Mittal, partners at FRP Advisory, have sold the business and assets of Kingswinford-based Francis Catering and associate company Design Catering Equipment, securing all 40 jobs.
The businesses will trade as Francis Commercial Kitchen Services and continue operating from the group's main office in the West Midlands and satellite warehouse in Stockport.
According to the administrator's report, 174 unsecured creditors were owed £1.8m by the company, including £362,122 to HMRC, £131,849 to Proline Corporation and £84,609 to Falcon Foodservice Equipment. The report says it is estimated there will be sufficient funds to make a distribution to unsecured creditors.
Francis Catering has been trading for more than 40 years, supplying catering equipment and industrial kitchen installations. Recent expansion included the purchase of assets and certain contracts out of the administration of Design Catering Equipment in 2014.
As part of the group's expansion, the securing of new, larger contracts involved upfront capital investment, which put unsustainable pressure on cash flow and working capital. After being unable to secure additional new funding, the group was left with no viable alternative to ensure ongoing trading, other than to seek a sale of its businesses and assets via administration.
The group engaged advisers from FRP to run an accelerated sales process in an attempt to secure a going concern solution. Stokes and Mittal were appointed joint administrators to the group on 4 September 2017.
Stokes said: "This is a positive result for a long established business, securing the jobs of a skilled workforce in the West Midlands and Stockport. Unitech Industries provides the ideal support and depth of management experience to provide Francis with the platform to prosper in the future."
Nick Imlah, group managing director at Unitech Industies, said: "We are glad to have been able to secure the future employment of such a large number of people. I look forward to working with the teams at Kingswinford and Stockport to re-build the brand and reputation of Francis."
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