Northumberland jobs have been saved after pipe and steelwork fabricator was acquired out of administration.
Insolvency experts were called in to West Sleekburn-based Armson Engineering in recent weeks amid cashflow issues and a large debt owed to HMRC. The five-year old business - which specialised in fabrication and maintenance of pipework, steelwork and mechanical plant equipment - had encountered challenges on a large contract and with an invoice financing provider.
Despite efforts to broker a deal with HMRC, officials filed a winding up petition against loss-making Armson amid nearly £850,000 owed. Meanwhile directors had put money into the firm to cover employees wages.
Administrators at FRP Advisory were subsequently appointed to the firm and after a marketing effort, Armson's assets and intellectual property were sold to BKA Engineering for £40,000. All 31 jobs were secured in the move, which sees Armson director Karen Armstrong - now a director of BKA - take control of the company.
FRP confirmed to BusinessLive that contracts Armson had been working on at the time of its collapse will be now be completed unhindered, which they indicated would benefit creditors. Documents show creditor claims of more than £1.76m, including £761,461 owed to Armson owner Thomas Armstrong. A summary of liabilities shows and overall deficiency of £1.56m.
The business had been incorporated in 2020 to buy the assets of Seaton Deleval-based Pipetawse Ltd, which belonged to the Armstrong family and had gone into administration having traded since the early 1980s. Pipetwase had repositioned itself amid the downturn in oil and gas work but had suffered bad debt and subsequent HMRC arrears.
All of Armson's 31 staff have now been transferred to BKA - which is trading from the same Ferguson Business Park address - under the TUPE system. A report on the administration also shows a basic, initial one-year business plan is in place in an attempt to reach profitability, as well as new additional financial controls, and oversight are to be put in place at BKA to "learn from past mistakes".
A report compiled by David Newman of the Pre Pack Pool - and independent group of businesspeople set up to assess pre-pack sales to connected parties - said: "Armson Engineering Ltd is a well-established fabricator, welder and installer of piping and steelwork to several º£½ÇÊÓƵ and Ireland heavy industries. It has been growing revenues consistently although has struggled to break into profitability even with a focus on costs and customer selection and has struggled to fund the debtor ledger in recent times.
"Due to unpaid taxes and not being able to adhere to a time to pay arrangement, HMRC has petitioned to wind the company up on April 25, 2025 with a court hearing due in early June, although they agreed to delay publishing this to allow a marketing process to try to sell the company and/or its assets to take place. "
Mr Newman went on to say BKA Engineering had been negotiated up in its offer, which FRP and Gordon Brothers believed to be the best in the circumstances. He added: "The larger benefit to the transaction is both the mitigation of employee claims and improved debtor realisations given the continuation of trade which is evidenced by the draft estimated outcome statement prepared by FRP Advisory."
Preferential creditors of Armson are expected to be paid in full, while secondary preferential creditors are expected to receive a dividend. Unsecured creditors are not expected to receive a distribution.
