Deal secures future of logistics company
CREDITORS have overwhelmingly backed a Company Voluntary Arrangement securing the future of a Suffolk warehousing and distribution company.The 98% vote in favour of the CVA has enabled Felixstowe-based LM Logistics to secure new investment from London firm Merchant Corporate Recovery plc which will take effective control the company with 51% of the shares.
CREDITORS have overwhelmingly backed a Company Voluntary Arrangement securing the future of a Suffolk warehousing and distribution company.
The 98% vote in favour of the CVA has enabled Felixstowe-based LM Logistics to secure new investment from London firm Merchant Corporate Recovery plc which will take effective control the company with 51% of the shares.
Depending on the level of debt recovery, creditors of LM Logistics will receive a payout of between 27p and 41p in the pound.
Tony Barnes, managing director of LM Logistics, who previously held a controlling interest in the business, said the outcome was “testament to the belief in the company by all parties, suppliers, clients, shareholders and in particular the staff who have all played their part in helping the company through this difficult time”.
He said: “The suppliers have been extremely understanding and the company will endeavour to support all those in the years ahead and wherever possible enable them to recover any losses they have suffered.
“The clients have by and large stayed loyal to the cause which I believe is a tribute to the staff and high level of services we provide, and also indicates that people realise that our difficulties were not the result of poor management but that we were purely victims of economic situation that has caused so many problems to so many companies over the last 18 months.
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“All our staff agreed to an 8 % reduction in their pay earlier in the year with a couple of people taking voluntary redundancy - I can't praise the staff highly enough for the support and commitment they have shown in helping to secure the long term future for all concerned.”
Mr Barnes said the manager-shareholders had probably lost the most, having not only given up the majority shareholder and but agreed to write off �192,000 owed to another group company as well as taking pay cuts along with the staff.
He added: “Hindsight is a wonderful thing and looking back maybe the company did expand a little too quickly too soon, but like everyone else we just couldn't envisage the economic downturn that followed.
“We have spent enormous sums over the last three years to ensure we can provide the highest levels of service and due to the downturn we have not managed to recover these costs through increased rates from our clients.
“Going forward the infrastructure is still in place to benefit our clients for years to come and our quality control systems, integrity of staff, security systems, vehicle fleets and IT Systems keep us well ahead of our local competitors.”
When news of the company's difficulties first emerged last month, Mr Barnes warned that the agreement of a CVA was vital to securing the new investment and that, without it, the firm would probably face administration.
LM Logistics, based in Parker Avenue, Felixstowe, employs a total of 143 people and operates a fleet of about 30 vehicles. It has a total of 310,000 sq ft of warehousing space, although this is leased rather than owned.
Associated company Syntex Logistics, which was acquired by LM in 2006 and specialises in container haulage, is not involved in the CVA.