Arjo admins seek 'credible interest'
Wednesday, October 5, 2022
Administrators at Arjowiggins have said there is “potential interest” in its business and assets, but in the absence of offers for the two mill sites as manufacturing facilities they are continuing to wind down operations.
In an update issued to Printweek today (5 October) joint administrator Blair Nimmo of Interpath Advisory in Scotland said: “We continue to explore potential interest from both trade and financial investors in the AW Group’s business and assets. Both the Stoneywood Mill and Chartham Mill sites are being given maximum exposure to identify if any party will step forward to purchase these as paper making facilities.
“However, in the absence of any credible interest in the acquisition of either site as a manufacturing facility, the Joint administrators will continue to wind down operations at each Mill.
Nimmo urged any interested parties to make contact as a matter of urgency “regardless of their interest being in the business (or part thereof) and / or specific assets”.
Nimmo and his colleague Alistair McAlinden were appointed joint administrators at ten Arjowiggins Group companies on 22 September, including the historic mills at Stoneywood in Aberdeen, and Chartham in Kent.
Alistair McAlinden said that Interpath was also liaising with key customers “to establish if existing orders can be fulfilled from the group’s paper stocks”.
Any customers wishing to understand the stock levels available should contact the joint administrators as soon as possible.
McAlinden added: “In addition, we continue to work closely with PACE, the Unions and other UK and Scottish Government support bodies to ensure all employees impacted by redundancy are extended the maximum support possible.”
PACE offers redundancy support for people and businesses in Scotland via local support teams.
Arjowiggins received £12m in funding support via Scottish Enterprise including support for the 2019 MBO that rescued the business after the failure of its then-parent company Sequana.
There have been calls at the Scottish Parliament for the business to be saved via nationalisation.
In response, First Minister Nicola Sturgeon said it was “an exceptionally difficult time” for the employees affected – the group employed 463 across the UK and 368 have already been made redundant.
She said the Scottish Government has been working, principally through Scottish Enterprise, since 2019 to support the company and to try and find an alternative future.
“Despite all of these best efforts that has not proved possible and is deeply regrettable.”
She said the government would continue to do all it could to understand any possibilities for the business.
Scottish Enterprise is a secured creditor. It has provided loans totalling £12m and an equity investment of £100,000.
A spokesperson said: “We have worked with Arjowiggins for many years. Once it became clear the company was facing administration in late 2018, a concerted effort by SE and our partners was made to secure the company’s future and protect the employment of its 360 staff. Our decisions to support Arjowiggins at that time were based on a shared view, alongside private investors, that the company had a viable future.
“However, conditions deteriorated and despite the best efforts of everyone involved it has not been possible to secure a sale of the business as a going concern. We are now working closely with the administrator, alongside our partners, to support the workforce at this difficult time and to explore all options for the future of the business.”
The Stoneywood mill has been making paper since 1770 and specialises in fine papers, while Chartham has been in operation since 1738 and makes translucent papers.
The group’s overseas subsidiaries include the Guarro Casas mill in Spain, and Quzhou mill in China. Neither is included in the insolvency proceedings.
However, because of the situation there has been industry speculation about the likely future ownership of those mills, with acquisitive Italian paper maker Fedrigoni tipped as possibly interested in Guarro Casas.
A Fedrigoni spokesperson told Printweek the business had “nothing to say at the moment”.