Modec slips into administration

Date: Monday, March 7, 2011

Electric van manufacturer Modec has entered administration.

On 4 March recovery specialist Zolfo Cooper took over the day to day running of the Coventry-based company that numbers Tesco, Marks & Spencer, logistics firm UPS and parcel delivery service FedEx Express among its customers, as well as local authorities such as Coventry Council and the London Borough of Islington Council.

The administrator made 26 redundancies across the business when it stepped in, almost 50% of Modec’s workforce, in order to “protect the value of the business” as it looks to find a buyer for the company as a going concern.

Ryan Grant, partner, Zolfo Cooper said: “Unfortunately the business has experienced severe cash flow difficulties in recent times. This, combined with the tough economic climate, has led to the need for administration.”

Modec was founded in 2004 by Lord Borwick, who invested £14m in the business following the sale of his stake in London taxi manufacturer Mangenese Bronze. David Cameron, then leader of the opposition, opened Modec’s factory in 2007.

In December 2009 it entered into a joint venture deal with US commercial vehicle giant Navistar, which had a turnover of $15bn (£9.2bn) in 2009.

But despite having plans to produce 2000 vans a year, Modec has sold just 400 vehicles – 150 in the UK.

In 2009 the firm reported a pre-tax loss of £6m and net liabilities of £29m on turnover of £9.3m.

 



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