Our client is a facilities managements and maintenance company that has the rights to a number of material handling products supplied for the use in both Aviation and Marine environments. It also provides consultancy and facility management whilst undertaking engineering maintenance to a number of clients at Heathrow Airport and surrounding area. The company was established in 2009 to acquire another business within the same industry.
Up to and including the third quarter of the first year the business was performing as projected. However as the recession bit the Company’s clients began cutting back on services and equipment. As a result the Directors were faced with the promise of good profitable contracts being delayed or put on hold pending decisions. Funding restrictions imposed by lenders limited short term cash availability which in turn restricted trading. At this point the company also had a high cost invoice factoring facility.
During the previous financial year the company was running at a profit and the turnover of the company was circa £500,000.
It was clear the company required external help and so, based on the advice of Beer & Young a CVA was prepared; this was arranged at a rate of 100p in the £1 over a 5 year period and was supported by the Company’s creditors.