Great Yarmouth firm E-Tech Group seeks support of creditors
06:30 22 September 2012
A Great Yarmouth firm is seeking to strike a deal with its creditors to put its finances on a firmer footing in the wake of cash flow problems linked to difficulties over a major water industry contract.
E-Tech Group, based on the Harfreys Industrial Estate, has proposed a company voluntary arrangement (CVA) deal with its creditors, calling in business advisers Grant Thornton to oversee the move after facing financial difficulties in the wake of the wrangle.
Creditors are being called to a meeting in the town on October 5 to discuss the plan, which if agreed would freeze and settle outstanding accounts and offer them a dividend of 63p in the pound over four years.
E-Tech, which specialises in offshore and shipping electrical installation work, has enjoyed a period of sustained growth while its export efforts also saw it win the EDP Business Awards international enterprise category last year.
Bosses, who have written to creditors and suppliers detailing the move, said that the firm, which employs 200 staff, had been placed in difficulties through circumstances beyond its control and had opted for the CVA in a bid to keep jobs and focus on the profitable core business and save the firm from administration.
Gary Williams, group director, said: “This has become necessary due to a number of contractual disputes in several water industry related contracts which are taking longer to resolve than anticipated and have resulted in a serious shortfall in the company’s cashflow.
“We must stress we are not entering into administration or liquidation as having had Grant Thornton carry out a full viability review of the company we are reassured that they have found the company’s core bus-iness to be robust and profitable.”
He added: “It is the intention and wish of the board to carry on with the business even though we appreciate it will not be easy at times. We felt the alternative was most unpalatable to our suppliers and clients alike.
“We have no intention of making changes to the divisions or staff but we must stress the importance of everyone working together to support this. Improving profitability and margins as well as ensuring overheads and other costs are controlled will play a key part in the success of this.
Ian Carr, partner at Grant Thornton, said: “The CVA proposal will be subject to a vote by the creditors and the meeting. The proposal offers creditors a dividend of 63p in the pound over the course of four years. This is a much better result than could be achieved in a liquidation of E-Tech Group Ltd, which would result in an estimated dividend of only 6p in the pound.”
Simon Gray, chief executive of the East of England Energy Group, offered his support to the firm.
“This is the best outcome for all parties as it means the business can continue to trade, creditors will receive a better outcome than any other financial mechanism and jobs will be saved,” he said.