A pre-pack insolvency procedure at a Lancaster-based modular construction company has saved the jobs of all 88 staff.
Following the appointment of administrators from Dow Schofield Watts, the company's staff and key contracts have been transferred to a sister company.
OEP Building Services had suffered cashflow problems due to the impact of Covid, and a series of other challenges including the closure of key customers and suppliers.
A pre-packaged insolvency (a "pre-pack") is an arrangement under which the sale of all or part of a company’s business or assets is negotiated with a purchaser prior to the appointment of an administrator, and the administrator effects the sale immediately on, or shortly after, his/her appointment
The business was founded in 2011, and originally offered project management and installation services at construction sites, under the stewardship of Iain Crabtree and Jan Zawadzki, using pods from a supplier in Poland.
Following the announcement of Britain's exit from the EU, in 2017, the two men were joined by David Cowperthwaite, and the company launched its own manufacturing operation, initially employing 30 staff in Lancaster, and started working in partnership with a manufacturer in Bradford.
OEP’s UK-manufactured pods proved popular with clients concerned about the impact of Brexit, and the business grew rapidly. However from 2019 onwards the company suffered a series of challenges, including the collapse of a key customer, a dispute with its insurance company over a pay-out, and, following the onset of the pandemic, a five-week closure of its factory and the cancellation of a £4 million contract.
The company also suffered the loss of a major loan facility following the collapse of its peer-to-peer lender and two suppliers going into administration, one of which being its sub-contract manufacturing partner. While the company was able to step up production in Lancaster, it was further hit by sharp rises in materials costs on its fixed-price projects.
Lisa Moxon of Dow Schofield Watts, Administrator to the company, said: “In the space of a few years, the OEP team have developed market-leading products, built up a UK manufacturing facility from scratch and become a major local employer.
“Sadly they have been hit by a series of challenges, ranging from the pandemic to the collapse of key customers and partners and unprecedented rises in materials costs. Despite the best efforts of directors, they had little option but to put the company in administration.
“The pre-pack represents a fresh start for the business, enabling it to continue to meet the growing demand for modular building products, and save the jobs of all 88 skilled workers. We wish them all the best for the future.”
