Posted 31st July 2013 | 3 Comments
Railcare in crisis after takeover talks break down
ROLLING STOCK maintenance firm Railcare has been placed in administration, following the apparent breakdown of takeover talks with Knorr Bremse.
It had been reported that the deal was almost complete, but it appears that failure to reach final agreement over the past few days has left the firm in crisis.
Railcare has premises in Wolverton and Springburn, and the RMT has alleged that problems became apparent when staff were not paid.
The union is also claiming that the Government has rejected appeals for a £1 million bridging loan to keep the company in business.
RMT general secretary Bob Crow said: “RMT is calling on Vince Cable and the Government to step in to secure the future of these 500 key rail fleet engineering jobs following the collapse of Railcare. The Government cannot sit on their hands and watch this situation play out for the want of what we believe is not much more than a million pounds of cash flow finance. Reports that Railcare have already been turned down for assistance make a mockery of the Government’s business strategy and their stated objective of protecting skilled jobs."
No one at Railcare has been available for comment, but administrators BDO confirmed that they were appointed on 31 July.
In a statement, the firm said: "The Joint Administrators are currently liaising with customers to understand their exact requirements, so trading may continue in administration while a purchaser for the business and assets is sought."
BDO business restructuring partner Kim Rayment said: “Unfortunately the economic climate and difficult trading conditions significantly affected the business, together with reduced demand. However, we are hopeful of securing a sale and, depending on customer requirements, the Company may continue to trade whilst this is explored.”
Railcare's clients include Greater Anglia, and the company has also just completed the refurbishment of the Heathrow Express fleet.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Tony Pearce, Reading
I'm not in a position to comment on this individual case but would anyone want to take over any firm that is on the point of failure ? Especially if debts were so high that you are going to have to finance that debt as well as pay to buy the shares. Generally speaking if you discover that a firm you wish to take over is on the point of collapse you let it fail and then move in and buy the bits you want - free of debt- from the administrator. Firms often owe money to banks and they are very keen to get their money and interest back. Banks hate firms going bust unless absolutely necessary. No doubt much of this firm may well be salvaged but job and pay cuts often loom in such circumstances. No-one wants to throw good money after bad whether they be a Government or a private organisation. Again I stress I do not know anything about the financial state of either firm and am speaking generally about companies and organisations that get themselves into financial difficulties.
IK Brunel, Beeston
If rolling stock ownership weren't so fragmented, then there would be economic merit in a rolling stock owner taking over railcare to protect their supply chain. I do hope a solution is found quickly, my experience of administrators is that they milk any remaining income & assets with their extortionate fees, £500 per person hour of their time isn't unheard of.
informer, wolverton
the board of directors and the shareholders have bled this company dry!! how could railcare last long when they use a agency for most staff, the agency used is under the same group of companys as railcare!! yet the diff between agency pay and money paid to the agency was £5!! that's per hour!! 1 worker doing 8hours = £40 lost times this by 100 and your losing 4grand a day!! to another company in the group!! staff are very unhappy with this, and want it all in the open. and why is the finace director on holiday!!!!