An MBO team has now emerged as the potential future owner of Arjowiggins Fine Papers' Stoneywood and Chartham mills after lengthy negotiations with a preferred bidder failed to come to fruition.
The two mills, along with a sales office in Basingstoke, went into administration in January alongside a number of other related UK businesses due to events at parent company Sequana, which is now in liquidation.
Two months later there were said to be three interested parties, and this was then narrowed down to one preferred bidder by the end of March.
With a further two months elapsed, the failure to agree a sale has resulted in understandable jitters about the future for the businesses, which employ more than 600 staff in total. Stoneywood mill near Aberdeen dates back to 1770 and employs 489 staff; while Chartham mill near Canterbury in Kent employs 90 and has been producing translucent paper since 1938. The Basingstoke office has 28 staff.
A spokesman for the joint administrators at FRP Advisory said: “The joint administrators have begun discussions with a management buyout team after negotiations with a preferred bidder ended without a sale. Discussions will now be progressed with the MBO team, Scottish Enterprise and other interested parties over the coming weeks to explore whether a sale can be secured. In the meantime, it remains ‘business as usual’ and the plant continues to operate.”
A Scottish Enterprise spokesperson said: "We remain committed to working with the administrator and our partners to find the best possible outcome for this business and its employees, including exploring the option of a management buyout.”
Arjowiggins Fine Papers (Stoneywood mill) had sales of £123.6m in its latest accounts, for 2017, but only made a small operating profit of £965,000. It makes fine papers including Conqueror, which has been made at the site since 1888. Two-thirds of its sales were made through merchant Antalis, in which Sequana has a majority stake.
Arjowiggins Chartham had sales of £14.4m for the same period, and broke-even after posting a £356,000 loss the prior year.
Stoneywood mill manager Angus MacSween is part of the MBO team but declined to comment. PrintWeek could not reach Chartham mill manager Mark Hobday at the time of writing.
Synthetic papers wing Arjobex in Clacton-on-Sea is not part of the proposed MBO deal. PrintWeek understands that the sale of this business is being handled from the French side of the Arjowiggins administration.