New deal for Heywood Williams
BUILDING products group Heywood Williams has emerged from a brief period of administration owned by its lenders after shareholders rejected a restructuring deal proposed in Manchester yesterday.
The deal has saved 1,000 jobs at the Halifax-based group with Lloyds Banking Group and Yorkshire Bank owner National Australia Bank taking an 80% stake in the new private company in return for writing off £21m of debt.
The management will have 10% and the remaining 10% of shares will be held in an employee benefit trust.
The deal angered private investor Paul Bell, who also holds a stakes in Altrincham shopfitter Styles & Wood and Haslingden-based Driver Group. He described the agreement as “outrageous” for handing control to the banks.
The deal is similar to the proposed restructuring plan that shareholders vetoed yesterday, a move which led to the appointment of administrators from Deloitte. Now the 10% of shares earmarked for existing shareholders have been allocated to employees.
Pace and Velox chairman Mike McTighe has been appointed to the new board by the banks. Robert Barr, the chief executive of Heywood Williams, said it would be “business as usual” with the same management teams in place across the group.
He added: “This restructuring secures over 1,000 jobs, protects the members of the UK pension fund, and allows Heywood Williams, our suppliers, and our customers to continue with business as normal.
“The new group has a great future ahead and we look forward to guiding it into a period of growth as our markets start to recover. The banks’ support demonstrates their faith in the strength of the underlying business.”
A spokesman for Heywood Williams, which supplies products for the housebuilding and home improvements markets in the UK, Europe and USA, said that the deal would see all creditors paid in full.
Two major shareholders, businessman Robin Graham and Isle of Man tax exile Paul Bell who owned 27% of the shares, had voted against the proposals at yesterday’s meeting preventing the company from securing the 75% of votes needed.
Mr Bell, 43, said: “The management team responsible for the mess the company is now in are delivering absolute control into the hands of the banks and being rewarded with a ten per cent stake in the business and the right to keep their overpaid jobs. I would rather kiss my shareholding goodbye than see this deal go through.”
However a spokesman for the company said that Mr Bell had not put forward any alternative proposals to the company and hence Dan Butters, Bill Dawson and Neville Kahn of Deloitte were appointed as joint administrators to Heywood Williams. Following that the company was sold by the administrators to a new company, Arran Isle.
Completion of the sale is expected to be effected within 28 days. None of the trading companies are subject to insolvency proceedings.
Lawyers from the Manchester office of Pinsent Masons advised on the restructuring deal.
