The clock is ticking on crisis hit Fife furniture maker Havelock Europa after it filed a notice of intention to appoint administrators.
The move means the Kirkcaldy-based group – which employs around 300 staff – has a maximum of 10 days to address the funding crisis which is engulfing it or face collapse.
The timescales may be even tighter as the move does not prevent secured creditors from requesting an administration appointment without prior notice.
“Unless circumstances change, and in accordance with statutory requirements, the board intends to appoint administrators within 10 business days,” Havelock said in a statement to the stock exchange today.
“The secured creditors can, however, appoint administrators without the requirement for notice.
“The directors remain in discussions with potentially interested parties with a view to protecting the position of creditors.
“There can be no guarantee however that such discussions will conclude satisfactorily.”
The notice was filed on Wednesday and was formally notified to the London Stock Exchange today.
It follows the suspension of the group’s shares from London’s AIM-index on Wednesday after it admitted it was seeking urgent funding to continue as a going concern.
Havelock supplies furniture and fittings for shops and public buildings and has worked for household names such as M&S, TSB, Lloyds, Balfour Beatty, Dixons Carphone and House of Fraser.
The company secured an £8 million refinancing in February but last month flagged a potential uncertainty over its ability to continue as a going concern and this week said trading conditions had further deteriorated.
In a statement on Wednesday morning the group said: “The company needs further financing for its immediate working capital needs hence the board is obliged to consider steps to protect the position of creditors and is in discussions with potentially interested parties in this regard.
“The company’s ordinary shares will therefore be suspended from trading on AIM with immediate effect pending clarification of its financial position.”
GMB Scotland, which represents around 90 of the firm’s workers, later described the situation as “critical.”
The group made a pre-tax loss of £5.92 million for the year to December 31, a significant worsening of its financial situation following a slim £22,000 profit in 2016.
Sales also slid from £60.8m to £53.19m in the period.
Lesley Laird, MP for Kirkcaldy and Cowdenbeath, said: “This is obviously disappointing news for Havelock, its employers and staff.
“I’ve been in contact with the company over the past few months and continue to be in touch to see how things are progressing.
“We need to make sure that the company’s talents and its varied products are given the best opportunity to be remarketed – because Havelock are a good company which produce fantastic products and it will be a real blow if a buyer is not found.
“With the type of products Havelock have and the clients and contracts they have, I’m sure they will be seen as an attractive option to other companies, and hopefully a deal can be done soon.”
