Business Irish

Monday 14 October 2019

Wrightbus left teetering on brink as it fails to close a deal

Rocky road: Wrightbus has faced growing financial difficulties due to a downturn in markets
Rocky road: Wrightbus has faced growing financial difficulties due to a downturn in markets

Margaret Canning

Suppliers to Wrightbus are bracing for a possible financial hit as the bus giant teeters on the brink of administration.

Directors of the Ballymena, County Antrim, business are expected to appoint administrators this week after it failed to close a deal with potential buyers of the cash-hungry enterprise.

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A loss of jobs among Wrightbus's 1,400 staff could make it one of Northern Ireland's biggest corporate casualties of the last 10 years.

In addition, dozens of suppliers would be hit if the company sinks into insolvency, with a ripple effect of further job losses. Some firms are fully dependent on Wrightbus for survival.

A spokeswoman for Wrightbus, which was co-founded by William Wright seven decades ago, said it had no update on the next steps that will be taken.

Last week two would-be buyers, including entrepreneur Jo Bamford, whose father owns machinery giant JCB, had walked away from a potential takeover.

One person in communication with Wrightbus said: "They're still working very hard to see if anything can be salvaged there."

Wrightbus has faced growing financial difficulties due to a downturn in demand in some of its major markets, prompting it to appoint business advisers Deloitte in July to help it find investors.

Now it's likely that the directors will also appoint Deloitte administrators in a process which could see the failing parts of the business stripped away to isolate assets which can then be sold.

And it's possible that a so-called pre-pack administration could involve a buyer lined up before administrators are appointed.

With the 'old' business in administration, a new business would be created for sale.

"It's likely the case that it's fundamentally sound but with so much complexity that it's easier to let it go (into administration) and pick up the pieces," one insolvency expert said.

And while Mr Bamford and another buyer - thought to be the Chinese giant Weichai - have left the stage, one observer said interested parties could return following administration.

But the large numbers of staff at Wrightbus are thought to be a stumbling block.

"There's a big hole in terms of cash and there's not enough work to look after all the staff that there are," an observer said.

Irish Independent

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