TransTec plc, a Birmingham, England-based injection molder and metal parts fabricator, was placed in receivership Dec. 30. The company plans to sell its assets, including four molding plants, to settle its debts. TransTec's plight has received high-profile attention in the United Kingdom because the firm's chief shareholder and former chairman is controversial ex-government minister and wealthy Labour Member of Parliament Geoffrey Robinson.
A former treasury minister, he had resigned from Tony Blair's administration under a cloud following the revelation of an undeclared loan to cabinet colleague Peter Mandelson, who also stepped down last year.
The company, which reported a half-year loss of 4.1 million ($6.7 million) in September, was forced to call in receivers after refinancing talks with its lender banks collapsed, two top directors resigned over accounting irregularities and, on Christmas Eve, its shares were suspended on the London Stock Exchange.
The directors, Chief Executive Officer Richard Carr and former finance director Bill Jeffrey, resigned following news that the company had failed to disclose an $18 million claim made against TransTec by a major customer, Ford Motor Co.
The claim, submitted in 1996, arose from the late delivery of engine cylinder heads for the launch of the Ford Explorer, supplied by TransTec's Northern Ireland castings and machined parts business.
TransTec, which has metal component operations in Spain and Australia, employs 4,500, with 4,000 of those workers at plants in England, Wales and Northern Ireland.
Accounting firm Arthur Andersen, which is acting as the receiver, intends to sell the businesses as going concerns.
"Intense competitive pressures in both the markets for the group's automotive products and for injection molding products have created very difficult trading conditions," said David Duggins, a partner at Arthur Andersen. "However, the group has strong trading relationships, a good asset base and a skilled work force."
An Andersen spokesman said the receivers already have attracted interest in several parts of TransTec's operations, but none in purchasing the firm as a whole.
TransTec was formed in the 1980s by Robinson, the former chief executive officer of Jaguar Cars. It beefed up its plastics and rubber molding in 1997 with the $30.2 million takeover of Vector Plastics Ltd. That added four injection molding plants, in Manchester, Walsall and Margate in England and Newport, Wales, to TransTec's existing Otford Manufacturing molding operations in England and Wales.
Since then the company has closed plants in Walsall and Telford, England, blaming a slump in demand for color televisions and domestic appliances.