Brown & Newirth saved by management buy-out.
Jewellery company Abbeycrest has been put into administration following months of speculation about the financial future of the company, but subsidiary Brown & Newirth has been saved by a management buy-out.
The company had been scrambling to pull in extra capital through closing its Leeds HQ and then attempting to sell off the Thailand division of the business, but efforts to save the business have failed and now it has entered into a pre-pack administration.
In a statement released to the London Stock Exchnage this morning Abbey crest said that following discussions with discussions with new funder Chrysus “it became evident that the only course of action available was for the board to place Abbeycrest into administration”.
John Malcolm Titley and Andrew Poxon of Leonard Curtis have been appointed as joint administrators and the company said that a further announcement will be made in due course.
In addition to its Thailand manufacturing arm, Abbeycrest owns British wedding ring specialist Brown & Newirth, which has been saved from administration through a combination of a management buy-out and cash injection from Chrysus.
On Friday Abbeycrest issued a statement to confirm that Manchester-registered Chrysus, a privately owned investment vehicle, had acquired the loans made to the group by Moorgarth and Michael Lever, its junior creditors. Chrysus acquired each of these loans and related security arrangements by way of assignment.
In addition to these arrangements, Chrysus provided additional funding of £780,000 to Abbeycrest, of which £480,000 will be used to redeem the debt owed to Burdale Financial and £300,000 will be used to provide additional working capital for Brown & Newirth.
Brown & Newirth sales director John Ball said that jobs at Brown & Newirth are safe and that there will be no redundancies made as a result of the new ownership. The brand is currently exhibiting at The Jewellery Show in Birmingham and has been continuing to take orders from retailers for delivery in the coming months.
Abbeycrest has been struggling financially for some years, although the introduction of Ashton as executive chairman led to the implementation of a strategy that has vastly reduced the company’s debt over the past two years.
Speculation of the fate of the company has heated up since the beginning of the year as it began to make disturbing noises on the market. In November it informed shareholders that despite reducing working capital by £200,000 that month that it might need to do so again in January or extend its banking facility.
The company then announced that it had closed its Abbeycrest headquarters in Leeds to move in with subsidiary Brown & Newirth in Hatfield, and on January 27 it announced that the UKLA had suspended trading of Abbeycrest shares at the jewellery company’s request after negotiations to sell the Thailand manufacturing arm of the business failed to be completed in a timeframe set for the company.