Jobs at risk as engineering group starts insolvency process
More than 160 jobs are at risk as castings and engineering group Chamberlin starts insolvency proceedings.
The Walsall-based foundry operator was hit with a winding-up petition from its main power supplier and has since faced “increased pressure from other creditors and its bank”.
Shares were suspended from trading on AIM on May 7 due to the petition, resulting in the group losing further sales revenue. In a trading update, Chamberlin confirmed it is now unable to secure additional “funding of the scale and form required for ongoing business stability”.
Despite cost reduction actions and wholesale customer price increases implemented across the group, the group has a lack of liquidity to keep it above water. The fate of Chamberlin’s 165 staff is currently unknown.
CEO Kevin Price has confirmed the decision to commence an insolvency process with further updates to come.
He said: “Following the Company’s announcement on 7 May and the subsequent discussions with creditors, customers and shareholders, we do not have a funding solution that provides the necessary liquidity in the time we have available.
“On behalf of the Board, I express to our staff, shareholders and all other affected stakeholders our deepest regret that we are having to take the very difficult decision to commence an insolvency process.”
The underlying demand for Chamberlin had been lower than expected in Q3, with lower sales also negatively affecting profitability and working capital. To tackle the challenges, price increases as well as a cost-cutting strategy were implemented but this resulted in the share price dropping.
Chamberlin sold its specialist industrial manufacturing subsidiary in a £3m deal to Project Apollo, part of investment firm Longacre Group. Petrel operates across the world in the oil and gas, marine and defence sectors and its 35 employees based in Kitts Green, Birmingham, will be retained by the new owners and will add to its 700 employees across Europe, the US and Asia.
Proceeds from the deal were expected to reduce the group’s liabilities by £2.6m and contribute a profit of no less than £2m in 2024. £600k will be paid to HSBC to reduce Chamberlin’s debt and release certain charges over the shares and assets of Petrel.
