Sigma Rollers of India has bought the assets and stock of the Kettering company, which was placed into administration with Deloitte at the end of March.
The business will be renamed Sigma Rollers UK. Yadviender Singh, the managing director of Sigma Rollers in New Delhi, becomes managing director of the UK company. Prem Saggu also of Sigma Rollers India, becomes a director.
John Walshe, who was general manager of RotaDyne UK, takes up the same role with the new business and will be responsible for the day-to-day running of the operation.
“We are starting production again as of this week,” he said. “We’ve re-employed 15 of the 28 staff, and hope to take on more once we get up and running.”
RotaDyne (UK) hit problems after quality issues caused it to lose major customer Heidelberg. Under its then ownership the loss-making business was also coming under pressure to sign a new five-year lease with its landlord.
The administrators’ report stated that the decision to call in Deloitte had been made “in view of the current trading conditions and the quality issues that had arisen with regard to the rubber compound used in the manufacture of the rollers and the related warranty claims, which led to the eventual loss of the company’s major customer.”
Rotation Dynamics Corporation of the US (also known as RotaDyne), the parent company of RotaDyne UK, has not responded to requests for comment.
RotaDyne UK supplied parts of Heidelberg’s dealer network, but did not supply Heidelberg UK.
Walshe said key clients including Autobond and St Ives Clays had kept faith with the business during the period of disruption caused by the administration.
“The company has to re-establish itself and prove itself. Resuming supply to our core UK customer base is the first step,” he said.
“We are also one of the few companies in Europe that can repair carbon fibre cores,” he added.
The rubber compound used to manufacture products for the firm’s UK customers came from a different source to the problematic compound, Walshe said, and there were no quality issues with it.
Sigma Rollers UK has also agreed a new lease with the landlord, and will remain in the Kettering premises.
The joint administrators said that preferential creditors (holiday pay owed to employees) of RotaDyne (UK) would be paid in full.
Secured creditor Fifth Third Bank, owed £12.2m, will not be repaid in full, and unsecured creditors – owed a total of £8m – had “no prospect of any return” other than a small distribution via the prescribed part, which is a maximum of £600,000.
RotaDyne UK left a total estimated deficiency of £19m.
The business had sales of £2.7m in the year to 31 December 2015 according to management accounts, and made a loss before tax of £303,000.
