Sunday, March 3, 2024

Administrators appointed at Doncaster manufacturer

A Doncaster-based manufacturer and supplier of carbon cathode blocks has fallen into administration, following increasing financial difficulties.

Chris Petts and Philip Stephenson of Grant Thornton UK LLP were appointed Joint Administrators of Bawtry Carbon Limited on 31 January 2024.

The company is a 100% exporter servicing a global customer base through manufacturing and supplying carbon cathodes and ramming pastes used by aluminium smelting companies. The company’s production facility is based in Doncaster and is one of a small number of suppliers within the EU to provide cathodes used in the production of aluminium.

The company has suffered significant financial challenges in recent years through exposure to unfavourable economic conditions resulting from COVID-19, the conflict in Ukraine, and raw material and energy cost inflations. All these, in turn, have created internal pressure on the company’s cash flow.

In response to these challenges, the directors sought to undertake a review of operations and explored options for the sale of the business and assets. However, due to continued strain on cash flows during this process, the sale was unsuccessful, and the directors resolved to place the company into administration.

The administrators are exploring options on next steps, working closely with clients and creditors to preserve and maximise value in the work in progress.

Joint Administrator Chris Petts said: “Despite the company’s niche manufacturing presence within the EU and strong customer relationships, the severe impact of recent external pressures combined with the credit failure of a key customer meant that it was not in a financial position to continue trading.

“We have had to make the difficult decision to wind down operations whilst the next options are explored, regrettably meaning the majority of the 105 workforce have been made redundant.

“Our immediate priority is to provide support to all the employees impacted by the administration and are providing support for affected staff in making applications to the Redundancy Payments Service. We will continue to update all stakeholders regularly while this process unfolds.”

Bawtry Carbon had been backed by Enact, a private equity fund, since 2019.

Chris Cormack, partner in Enact, Bawtry’s majority shareholder, said: “We are naturally disappointed not to have led an ultimately successful turnaround of Bawtry Carbon, which we backed through a MBO in 2019.

“Over the last four years and through our period of investment, we have been very supportive of the business, committing significant capital on acquisition of the business in 2019, and injecting further capital in 2023.

“However, the macroeconomic events of COVID-19 and the war in Ukraine have been felt throughout the Aluminium smelting industry both by the company and its customer base. The credit downgrade of its largest customer has ultimately made it impossible to continue as a going concern.”

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