Managers put together bid for Ferranti: Team sees 'bright future' without ISC

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The Independent Online
A TEAM of senior Ferranti managers is putting together a consortium to bid for the majority of the failed defence electronics company and has expressed its interest to the receivers.

The managers, led by Phil Burton, director of marketing, have been analysing the group's prospects with John Talbot and Murdoch McKillop, the Arthur Andersen partners appointed as administrative receivers earlier this month, with a view to making an offer in the New Year.

'It has become clear to us that, shorn of well-known problems stemming from the ISC (International Signal and Control) acquisition, the group has a bright future,' Mr Burton said.

But the receivers have also received approaches from a large number of UK and overseas groups interested in buying Ferranti businesses.

A spokesman for the managers said they believed they could succeed where Eugene Anderson, the company doctor who has tried to save Ferranti, failed. They would be free of the pounds 155m debts and liabilities and should be recapitalised.

'Capitalisation has been an inherent problem resulting from the International Signal and Control problem and we recognise that this has to be settled,' the spokesman said. 'We clearly recognise that we need partners strategically and people who will back us financially.'

The managers have had discussions with potential backers at home and overseas in defence and other industries. They are being advised by Richard Stone of Coopers & Lybrand Corporate Finance, which organised the management buyout at Leyland Daf.

Ferranti was placed in receivership at the beginning of December. General Electric Company had withdrawn a 1p-a-share rescue offer after examining Ferranti's books.

Although GEC gave no reason, its offer had been conditional on finding nothing 'materially adverse to the financial condition or prospects of Ferranti'.

Since then the receivers have made 630 of the company's 3,050 workforce redundant. Most of the redundancies are at Ferranti's main office and factory sites at Oldham, Wythenshawe and Stockport in Greater Manchester and Poynton in Cheshire.

Mr Anderson battled for three years to keep the company afloat. He joined in 1990 after the discovery of a massive fraud at International Signal and Control, the group's US subsidiary, which was acquired in 1987.

In the wake of the acquisition, Ferranti had a market value of pounds 1bn and was a leading force in the global defence market, with 26,000 employees and an order book worth more than pounds 1.5bn.

The shares are now suspended at a penny and nine-tenths of the workforce has gone.

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