UK: [updated 16:00GMT] Wagon heads into administration
British-based automotive parts supplier Wagon plc has gone into administration after talks over a refinancing deal with its major customers and banks broke down.
The firm's difficulties stem from a slump in demand for vehicles in Europe which has led to its customers scaling back vehicle production.
Today, Alastair Beveridge, Simon Appell, and Stuart MacKellar, Partners at Zolfo Cooper (formally Kroll's Corporate Advisory & Restructuring Group), were appointed as Joint Administrators to Wagon plc, the European automotive components manufacturer, as well as to its four UK subsidiary companies, Wagon Industrial Limited and Wagon Overseas Limited, Wagon Europe Limited and Wagon Services Limited.
In a statement the Joint Administrators said they will continue to trade Wagon plc as a going concern while they explore options for its future, which will include many of the European plants. None of the trading entities outside of the UK have filed for UK Administration.
Alastair Beveridge, Partner, Zolfo Cooper added: "The global automotive sector is battling unprecedented market conditions, which have led to many of the major car manufacturers significantly reducing their production schedules. This has had a major adverse impact on customer orders for Wagon and resulted in the liquidity crisis which has led to the appointment of Administrators. We will continue to trade the business as a going concern as we assess options for the business."
The publicly listed firm, which was controlled by US billionaire Wilbur Ross, counted PSA Peugeot-Citroen, Renault and Daimler among a wide customer base in Europe. It makes panels and door parts for Honda, Ford, General Motors, Land Rover and Nissan.
It employs some 4,000 people at 20 plants in continental Europe, as well as 500 in Britain. Some 53% of its total employee count are employed in France.
In the UK, Wagon employs approximately 500 people across its head office and two West Midlands-based manufacturing facilities in Brownhills and Coventry.
The administrators also said today that 'regrettably, a small number of redundancies are expected at the head office site'.
British newspaper reports said the proposed refinancing deal collapsed when the banks, led by the Royal Bank of Scotland (now majority owned by the UK government) withdrew support.