Comment: David Parkin on Heywood Williams

I’VE never met Paul Bell but he appears to be a rather angry man.

He’s likely to be even more angry this morning after effectively losing more than £200,000 of his own cash.

Mr Bell, an Isle of Man tax exile, had acquired 27% of shares in Yorkshire building products group Heywood Williams and used his votes to veto a proposed deal with its banks which would see them take an 80% stake in the company with 10% for management and the remaining 10% for shareholders.

He described the deal as “outrageous” and said that the management which had got the business into its current financial troubles shouldn’t be rewarded for failure with a chunk of shares following a restructuring deal.

But the company claimed that Mr Bell, 43, who had spent a lot of time outlining his views to the Press, didn’t put forward an alternative and so when he led shareholders in rejecting the plan at a meeting yesterday it put into place its alternative plan – which it had made clear it would be forced to do – to call in administrators.

Soon after the business emerged as a new company – Arran Isle Limited – with a very similar ownership structure to the original plan except that the 10% of shares it had proposed would go to existing shareholders are now in an employee benefit trust.

Perhaps it is my cynical mind, but this deal looked like the ultimate two fingers to Mr Bell. And the Isle of Arran isn’t a million miles from the Isle of Man.

Mr Bell and his fellow shareholders’ investment in Heywood Williams is now worthless whereas they could have at least had 10% of the new company.

The Halifax business, which supplies products for new homes in the US and Europe, has been caught in the eye of a storm – a stricken victim of the credit crunch and then deep recession.

Management must bear some blame for a spate of acquisitions at the top of the market that saw it pile on debt.

But its banks believe that this management team are the right people to take the business forward and they have backed them to do it. Rather that, you would say, than it becoming another corporate casualty of the downturn.