Owners of stricken construction firm sold majority stake to staff months before collapse
The owners of Walsall construction group Shaylor Group sold more than half of the company to its staff just months before it collapsed into administration with the loss of 200 jobs.
In documents filed at Companies House, 55% of the group’s holding company was purchased by an Employee Ownership Trust (EOT), an indirect form of employee ownership in which a trust holds a controlling stake in a company on behalf of all its employees and provides an incentive for owners to sell a controlling stake in their business.
The incentive for owners is that the Government introduced generous tax breaks to encourage shareholders to move to an employee-ownership model.
The deal, which was sealed on October 1 2018, was financed by the Allied Irish Bank, which declined to comment when contacted by TheBusinessDesk.com.
The transaction was thought to be worth around £15m, Construction Enquirer reported.
Raj Mittal and Tony Barrell, partners at FRP Advisory, confirmed their appointment as joint administrators of the business on June 17.
They said the group had experienced severe cashflow pressures in recent weeks following several project delays and after unsuccessful attempts to raise additional funding.
It was a dramatic collapse for the £140m-turnover, 50 year-old company, which only three months ago filed its annual accounts showing a second-consecutive £6m post-tax profit.
In its annual accounts which were approved by Shaylor’s board on March 21, chief executive Stephen Shaylor was upbeat. He highlighted improved operating margins that were achieved in the year to September 2018 and was looking ahead to a new financial year where it already had 80% of its target forward order book secured.
Shaylor Group is working on a number of projects in Birmingham, including the 15-storey Emporium student tower in Eastside, the DoubleTree by Hilton hotel in the city centre, and the Gilders Yard and Beaufort House residential developments.
The company’s collapse is also set to delay the opening of the £19.3m Silverstone Experience.
A spokesperson for the Silverstone Experience told TheBusinessDesk.com: “The Silverstone Experience was just two weeks away from practical completion when Shaylor Group went into administration, so whilst this means there will be a short-term delay to our public opening, the project is not in doubt.
“We are talking directly to the sub-contractors and will work with the administrator on transfer of the site from Shaylor Group.”
