Creditors back plan to support Great Yarmouth-based E-Tech Group
09:30 08 October 2012
Nearly 200 jobs were secured at Great Yarmouth firm E-Tech Group after creditors agreed a refinancing deal to help ease cashflow problems.
E-Tech Group, based on the Harfrey’s Industrial Estate, last month proposed a company voluntary arrangement in the wake of difficulties linked to a major water industry contract which would freeze and settle outstanding accounts and offer them a dividend of 63p in the pound over four years.
A CVA is a process which allows a firm to keep trading under the control of its own management team, instead of an administrator, and protects it from any aggressive moves from creditors such as a petition for a winding-up order.
And on Friday the move was backed by creditors at a meeting at Great Yarmouth’s Imperial Hotel where 96pc supported the plan.
The meeting heard that the business which employs staff at 11 locations across the UK including 90 workers in Great Yarmouth, had run into a £2m cash flow problem surrounding a mechanical and engineering contract and creditors were owed sums ranging from a few pounds to up to £400,000.
Director Gary Williams said as a result of the CVA being agreed, the firm would now focus on its core marine offshore oil and gas engineering business.
“As far as I am concerned there are 200 families, who can now breathe a little easier,” Mr Williams said. “What it does mean is that we now have a chance to put right these issues and get E-Tech back to being a successful organisation.
“It means we can get back to running the business and doing the things we do best. The 200 jobs are now secure as long as we manage our commitment to the CVA, which we feel is very achievable.”
Under the proposals agreed yesterday a five-man creditors’ committee will monitor the progress of the refinancing and pay-back, and there is also scope for creditors to get more of their outstanding money back if the firm’s profits exceed their current forecasts.
The company also appointed Simon Karr as its finance director, while it is expected to unveil a new managing director next week.
Ian Carr, partner at Grant Thornton, which is overseeing the CVA said: “I’m really pleased that the proposals were successful and approved by the creditors.
Now there is an opportunity by the company to continue trading and service its customer base.”