Shieldtech sold for £380,000
THE main trading subsidiary of body armour specialist Shieldtech was sold to a shareholder for £380,000 a week after going into administration with the loss of 65 jobs.
Steve Jenkins, who held 9% of shares in the former AIM-listed firm, bought AE Realisations – formerly Aegis Engineering – with his company Guard Shielding at the end of October, according to a creditors’ report.
Administrators at RSM Tenon received 13 expressions of interest and lined up four site visits after the company failed. But these were cancelled after Mr Jenkins put down a £40,000 non-refundable deposit in exchange for a week to raise the cash.
The report says he was also one of three loan note holders owed a total of £1.1m. His offer was the favoured bid for the company by the other two note holders, Bruce Gordon and Derek James.
Shieldtech, led by Tony O’Neill, experienced cashflow problems earlier in the year when body armour orders from the police fell. The company struggled when its banker, HSBC, insisted in June that earnings from an £800,000 contract with the Turkish police were to be held in an escrow account as security against a loan and an overdraft.
The following month management called in a team from the accountancy firm Deloitte to carry out a sale of the business. Three offers were made but later withdrawn following a period of due diligence in early October.
When administrators were appointed to Shieldtech and its subsidiaries Aegis Engineering Holdings and Aegis Engineering, the company had debts of £3.3m and unsecured creditors were owed £2m. They will receive a “small dividend”, while HSBC has been repaid an outstanding £100,000. Private equity investor NVM Private Equity also lost out when the firm failed as it held 7.5% of the shares.
In the year to June management accounts show the firm recorded a net loss of £435,000 on sales of £9.7m – down from £10.2m the previous year when the business lost £25,000.
