Business recovery firm Portland has successfully sold part of Chichester-based business SJ Engineering Specialist, maximising the return to creditors.
SJ Engineering, also known locally as Smith & Jewell, specialises in high quality metal machining and welding, producing parts used on commercial passenger aircrafts and Challenger tanks.
The part of the business that was sold made items crucial in the supply chain for an international aircraft manufacturer.
Without the steps taken by Portland to secure ongoing manufacturing, the whole of the aircraft production line would have had to be shut down with consequential losses further up the supply chain running into millions of pounds.
The work within the administration has seen Portland continue to trade the business to complete customer orders, collect debts of over £400,000, market the business for sale and ultimately conclude the sale of part of the business, which has also minimised job losses.
Associate director at Portland Stewart Goldsmith commented: “We realised early on that due to its strong blue chip customer base and good reputation, SJ Engineering could still be a viable business and there was potential for it to be sold. We therefore decided to oversee the continued trading of the business during the administration. Whilst this had its various challenges, this period helped us to attract interest from a number of parties and after considering the offers received, we were able to sell part of the business to a local multinational company. The purchaser has taken over one of the two operating sites, equipment and some of the employees. A great result in the circumstances”
Mike Fortune, director of Portland, said: “It was a very difficult time for everyone involved in the company, which had been trading for over 80 years. Ironically, due to the way the key customer was able to set the price, the amount per unit for the parts in 2017 was less than in 2010, despite rising costs. We have seen this ‘customer set pricing’ before with this type of business and it is very difficult for any business to survive in those circumstances.
“The company did however have some unique qualities which we identified and devised a strategy accordingly. We decided to take over all aspects trading and support employees during this difficult phase. In order to cut costs some employees were made redundant initially, but we were able to pay their outstanding wages so they were not left out of pocket. The remaining employees were transferred to the new business which has resulted in continuation of employment, reduced claims in the administration and therefore a better return to the company’s creditors.”
SJ Engineering was originally founded in 1935 as Smith & Jewell and manufactured parts for RAF Spitfire and Hurricane aircraft. During the Second World War it relocated to the South-Coast where it had since manufactured parts for the aviation sector and reconditioned parts for Ministry Of Defence tanks.
An online auction of the remaining assets held by the company, comprising mostly of metal working equipment, is currently live and due to end on February 14. Interested parties should contact the auctioneers Lambert Smith Hampton on 023 8024 9182.