This week: UK manufacturing continues to decline as factories laying off workers at the fastest rate in seven years and Eddie Stobart avoids administration after shareholders approve a rescue plan.
Eddie Stobart avoids going into administration after shareholders approve a rescue plan.
Logistics firm Eddie Stobart famed for its distinctive green and red lorries, has narrowly avoided going into administration after a £55m rescue package was approved by shareholders. The company had been on the brink of collapse as it has struggled to deal with its £200m debt pile and recent accounting errors. Private equity firm Douglas Bay Capital agreed to inject £55m of new financing which will allow the company to continue to trade. Shareholders will see their ownership diluted in the deal and the loan will come with high interest, however it was seen as the only viable option to allow the company to continue trading.
Eddie Stobart chief executive Sebastien Desreumaux commented "The proposed transaction provides Eddie Stobart with the opportunity to move forward and look to deliver sustainable growth and profitability from a stable footing. Our main priority and focus is now continuing to deliver the high levels of services expected by our customers as we move into the busy Christmas period."
UK manufacturing continues to decline as factories laying off workers at the fastest rate in seven years.
The monthly purchasing manager's index (PMI) fell to 48.9 in November from 49.6 in October. The index has now been stuck below the 50 mark (the figure that separates expansion from contraction) for eight consecutive months. The latest figure also indicates that Britain's factories are laying off workers at the fastest rate in seven years. Not since September 2012 has the pace of job losses been this steep.
Rob Dobson, a director at IHS Markit, said. "November saw UK manufacturers squeezed between a rock and hard place as the uncertainty created by a further delay to Brexit was accompanied by growing paralysis ahead of the forthcoming general election. Destocking at manufacturers and their clients following the latest Brexit delay was a major contributor to the weakness experienced by the sector. Inflationary pressures meanwhile showed signs of moderating further, with input costs falling slightly for the first time since March 2016."
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