Firm enters agreement in bid to see off going into administration
1:03pm Friday 22nd June 2012 in By Josh Layton
SWINDON aerospace firm Kembrey Wiring Systems, where 50 jobs are to go in a redundancy process, has entered a company voluntary agreement (CVA) to repay its creditors The CVA, which is used by companies to avoid going into administration, is part of what the firm has described as a “reorganisation and restructuring” process.
A member of staff had told the Adver that a group of employees who were being made redundant were the first to be told the news on Wednesday.
The employee, who did not want to be named, said the announcement was made by Will Gimson, son of the firm's director John Gimson, at the factory in Garrard Way, Greenbridge.
The company makes wiring harnesses and other specialist equipment for firms such as Rolls-Royce and helicopter manufacturer AgustaWestland.
Last month Kembrey responded to news of the redundancies by blaming a cut in military spending, among other problems, for hitting its order book.
The company had announced last July that it would create jobs as part of an investment by new owners Arundel Aerospace & Defence Systems.
The good news had followed a history in aviation engineering which began in 1954 and included work on the Nimrod, Harrier and Tornado aircraft.
But in a statement released on Thursday Kembrey blamed a downturn in the international military aviation market for its troubles, which have led it to seek the CVA, which involves a recovery plan being agreed between a company and its creditors.
The company said in a statement: “Demand for Kembrey’s work has fluctuated over this period in line with both military and commercial aircraft and helicopter requirements.
“Kembrey has had significant positions on many familiar but now historic aircraft with completed programs, including the Nimrod, Harrier and Tornado.
As a result of the recent financial crisis that continues to affect most countries, many governments have imposed consequent austerity measures and their impact on both government and military spending has impacted on the flow of work at Kembrey.
Some programs are now due to finish shortly.
“Despite their best efforts, the management of Kembrey have not been able to obtain the volume of work to replace these terminated programs, even although some new programs have been won on civilian aircraft, and in similar technology fields.
Consequently the directors have undertaken a reorganisation and restructuring of the company and its finances.
“The company previously announced that a program of redundancies was being considered, and as a result 15 voluntary redundancies and 35 compulsory redundancies from a total of 130 staff have been announced with effect from 29th June 2012.
“The directors have taken advice from the leading turnaround practitioners, the KSA Group, who has assisted in structuring a recovery plan for the business.
“This will involve the company proposing a company voluntary arrangement or CVA. We have been working closely with our advisors and are confident that our creditors will support this positive solution and trust that all staff, suppliers and clients can also continue to work with us to achieve a positive outcome for all concerned.”