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Administrators update on Arjowiggins

Joint administrators of FRP Advisory have provided a progress report on Arjowiggins’ UK businesses which are still in administration.

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Administrators have provided an update on Arjowiggins’ UK businesses

The six-month progress report, posted on Companies House, provides update on Arjowiggins Fine Papers, which runs the Stoneywood mill in Aberdeen; Arjowiggins Chartham, which operates the mill in Chartham; and Arjowiggins Sourcing, which was set up to purchase raw material across the group run by parent company, Sequana.

There are also reports for other subsidiaries of the Arjowiggins group including AW UK Holdings, Performance Papers and Arjobex.

All of the reports are dated August 13th, but the reporting period covers from January 14th until July 13th, 2019. In the report, joint administrators state that from their appointment until June 2019, the company has traded at a “broadly break-even position within administration” but noted that orders received from late July onwards had reduced “significantly”.

The report confirms that the sale of the businesses by management is still being pursued. A teaser document was sent out to 300 parties listed on FRP Advisory’s database which had expressed interest in similar opportunities previously.

Should the management buy-out not complete, joint administrators will move towards a wind down of both mills

A non-disclosure agreement was signed by 46 parties, which then were granted access to data relating to the companies. Of the 46 parties that made contact regarding the sale, 13 placed indicative offers or expressions of interest for individual sites.

A preferred bidder had been selected, but by May 2019 it was clear to administrators that the party would be unable to secure the funds needed “on terms acceptable to it” in order to complete a sale.

Should the management buy-out not complete, joint administrators will move towards a wind down of both mills and accelerate discussions with previously interested parties.

For the Fine Papers business, an extension to the administration will be sought “in due course” either by an application to the court or to the secured and preferential creditors.

At this juncture, it is not expected that an extension to the administration would be necessary

For the Chartham business, the report says: “At this juncture, it is not expected that an extension to the administration would be necessary.”

The joint administrators noted in the report that they were “aware of the importance of maintaining a supply of pulp while the mills continued to trade.

Before the companies were placed into administration, Arjowiggins Fine Papers bought pulp on purchase and consignment basis from another company within the group, which could clearly not be sustained after those businesses were placed into administration.

Arrangements were therefore made with other pulp providers to ensure a continuous supply.

Almost 500 people are employed at the Stoneywood mill, with a further 89 staff at Chartham, and 28 at the sales office in Basingstoke. The three Arjowiggins sites in France were placed into liquidation in March of this year. 

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