Cosalt set for administration
ADMINISTRATORS are set to be appointed at Cosalt after the marine safety business today admitted it had failed in its attempts to safeguard the future of the company.
The Grimsby-based business admitted last week that it was likely to go into administration by the end of February unless it could reach an agreement with its banks over its debts of £17m.
However, Cosalt has today told the Stock Market that it has been unable to identify any alternative sources of funding, reach agreement with its lenders or pension trustees.
As a result, its directors have asked its lenders, the Royal Bank of Scotland and HSBC Bank to appoint administrators to the company.
Cosalt said it expected administrators to be appointed “imminently” and that following appointment, the administrators will look to sell its assets, including the shares in Cosalt Offshore and Cosalt Workwear, in order to minimise potential losses to the company’s creditors.
An agreement for the sale of the shares in Cosalt Offshore has been negotiated with Dunwilco (1793), a company backed by NBGI Private Equity, the majority shareholder of ATR Group.
It is understood that Cosalt Offshore is to continue trading as normal.
The Cosalt Workwear business will be unaffected and will not be placed into any insolvency process.
Cosalt said it did not expect the disposal of the company’s assets to yield any value for its shareholders.
Once administrators have been appointed, Cosalt’s listing will be cancelled.
Cosalt has been trading at a loss for many months, its shares were suspended on the stock market last May and it has been bankrolled by chairman David Ross.
However, shareholders have accused Mr Ross of preventing the future of the business being secured, despite Mr Ross previously bidding to buy the company.