Havelock Europa, the Fife-based interiors fit-out firm, could be in danger of going into administration if a buyer can’t be found, after talks with investors failed.
The Kirkcaldy firm, which is thought to employ around 320 staff – the majority of which are based in Kirkcaldy – has had a difficult couple of years, prompting a suspension of its shares.
Bosses are now hoping that a buyer can be found to turn around the fortunes of the company, however it appears that talks have not gone as well as hoped.
The firm said that talks with investors were “unlikely to result in a positive outcome”.
In a statement today, Havelock Europa said: “The company has experienced an unexpected increasing credit squeeze from its suppliers, as a result of which it has substantially utilised its available facilities following the re-financing first announced on 20 February 2018.
“The Board announces that it has been in discussions with existing funders and investors in the company regarding the provision of further funding, however it became apparent yesterday evening that these were unlikely to result in a positive outcome.
“The company needs further financing for its immediate working capital needs hence the Board is obliged to consider steps to protect the position of creditors and is in discussions with potentially interested parties in this regard.
“The company’s ordinary shares will therefore be suspended from trading on AIM with immediate effect pending clarification of its financial position.
Earlier this year the firm said that it racked up pre-tax losses of almost £6 million last year as it counted the cost of lower orders and major IT issues.
A lack of finance also impacted on the firm’s ability to source materials although it has since received an £8m funding package boost from Scottish Enterprise and Bank of Scotland to back its turnaround plans.
David Torrance, MSP for Kirkcaldy, said: “I’m disappointed to see that Havelock Europa are having financial problems.
“I do know the Scottish Government have worked with them in past to try and secure the future of company and their skilled workforce.
“It plays a vital part in the local economy and I will now be contacting the Scottish Government to see what can be done to possibly help the company and their staff.”
Fife Council Co-Leaders Cllr David Ross and Cllr David Alexander issued a statement on the news. It said: “This worrying announcement potentially has a major impact on Kirkcaldy and mid-Fife, as the company is the one of the area’s largest employers.
“The council has been strongly supporting Havelock over the past year with regular officer engagement, and significant assistance from Scottish Government and Scottish Enterprise.
“This will continue as the company considers its options over the coming days, and the Head of Economy, Planning and Employability will be in daily contact with the company and the national agencies as the situation develops, to provide all possible support to the company and its workforce.
“Fife Council recently announced an additional £1m for economic regeneration in Kirkcaldy and mid-Fife.”