Romag jobs are saved after buyout by Gentoo
Tuesday 05 April 2011
Romag Holdings, the troubled glassmaker, was sold to Gentoo Group yesterday after failing to agree new financing terms with its lender, Lloyds Banking Group.
Gentoo, a construction company, bought Romag's assets and goodwill for a price Romag said was unlikely to give returns to the glassmaker's shareholders. The deal will save 161 jobs in the North-east.
Romag, based in Leadgate, County Durham, makes solar glass and composites for the security, architectural and specialist transport markets. It is part of the North-east's bid to become a hub for renewable energy.
However, the company was forced to look for bidders last month after revealing that former chairman John Kennair paid £4m of his own money into its operating subsidiary, Romag Ltd, to cover bad debts without telling the board.
The company also had to write down £2.3m for a disputed contract with a supplier that stopped making the product Romag needed. The writedown and delayed publishing of Romag's accounts while its books were audited triggered breaches of banking covenants with Lloyds.
Romag was in talks with the bank about restructuring its debt from the end of January when its Aim-listed shares were suspended but the talks failed.
Dan Butters, a reorganisation partner at Romag's administrator Deloitte, said: "We have successfully completed the sale of the goodwill and assets of Romag Holdings plc and its subsidiaries that will protect the 161 jobs that were at risk."
The company appointed Deloitte in mid-March to advise on its options, resulting in the sale to the Sunderland-based Gentoo.
Peter Walls, Gentoo's chief executive, said: "The acquisition brings together two complementary organisations, building upon our strong environmental credentials."
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