£18m T/o Pharmaceutical Manufacturing Company Saved With CVA

KSA Group rescues and helps management turn around £18m UK pharmaceutical manufacturing business with powerful Company Voluntary Arrangements deal.

1. Saved 155 manufacturing and admin jobs; 25 jobs lost, overall staff costs reduced by £1.3m per annum. No redundancy costs for company’s cashflow to absorb.
2. Returned unused manufacturing plant and equipment, to HP funder saving over £300k pa HP payments until 2028, representing a saving of more than £1.2m in cash payments.
3. Terminated obligation to pay rent and rates on 50,000 sq feet of unused factory property thereby reducing costs for rent, rates and overheads by £750,000 per annum. Institutional landlord supported the planned termination of the lease. Close liaison between KSA, the client and the landlord was vital to this process.
4. Architects of conjoined parent /subsid CVAs due to joint VAT/PAYE group. Effective joint and several liability.
5. Helped refocus board & senior management team on sales and improved product delivery, whilst cutting total annual costs by £2.7m.
6. CVAs were approved by £8.9m of creditor votes in favour, £101k against.

Chairman Mr X said “Hi Keith and team, I would like to record my sincere thanks to you and your team for the great advice, guidance and support you’ve brought to ***** Limited since January 2024. Getting through this nightmarish scenario would not have been possible without that expertise and the huge ability that you guys have brought to bear.

Now we are through the painful process safely, we need to focus strongly on the future success of the business”!

This was a complex case for the KSA team, but with innovative use of the powerful CVA tool for both parent and trading subsidiary, we have led the restructuring of this group which needed to exit a failed expansion project. This threatened huge contractual costs and financial obligations, after a massive construction price hike. The project costs nearly doubled after Covid and world supply side issues, clearly no longer commercially viable.

The total cost savings per annum are £2.7m, but sales will rise due to the launch of new innovative products, which will drive gross margins too. Forecast net profit in year one of £757k, sales of £18.13m will represent a good recovery from large losses made in 22 and 23. HMRC will be repaid in full over 4 years and unsecured creditors up to 16p in £1.

Like to learn how KSA Group can help you, your client or investee? Want to learn how a CVA can reduced fixed and overhead costs, as well as reduce debt?

If you CAN see a way to reduce costs, you CAN see a way ahead, you DO have a great product / service, but debts and future cost commitments are sinking the business – then you should bring in the Company Rescue experts.

Call the KSA Group turnaround team on 0800 9700539 or email Keith Steven on keiths@ksagroup.co.uk

Visit our website www.companyrescue.co.uk