Fairline has announced that it will be working with turnaround experts KSA Group in an attempt to rescue its ailing business
Fairline Boats has appointed a turnaround specialist to try to revive the yard’s ailing fortunes, following its surprise acquisition by British investment firm Wessex Bristol back in October.
The KSA Group is proposing Fairline enters into a Company Voluntary Arrangement (CVA) with its creditors in order to restructure its debts and return the yard to profitability.
Although Fairline is not thought to have any major outstanding bank debts, it does owe significant sums of money to many of its suppliers.
As the name suggests, a CVA is a voluntary arrangement setting out new terms for payment that must be agreed by 75% of the company’s creditors by value within a month of the proposal being made.
At the time of going to press the terms of the arrangement had not yet been finalised but a formal proposal will go out to all its creditors within the next four to six weeks.
Fairline claims it already has the support of its three largest creditors and is confident of winning the necessary 75% approval for the CVA, but admits that painful measures will be needed to transform the business, including a “significant number of redundancies”.
Fairline insists that no customers’ deposits or boats still in build are at risk, that it has sufficient funds to see it through the intervening period, and that all its remaining employees are still being paid.
It also claims to have a new investor waiting in the wings ready and willing to invest in new model development once the CVA has been approved.
A recent dealer meeting is said to have provided much-needed reassurance to its global distribution network and Fairline is confident this will lead to a number of new and postponed orders for boats, including the new Squadron 53GT, which is scheduled for launch in early 2016.
The move comes after new owners Wessex Bristol temporarily laid off 107 staff during its first week of ownership.
The full statement from Fairline Boats is as follows:
Since last month’s acquisition of Fairline Boats Limited, Britain’s leading luxury yacht manufacturer, new owners Wessex Bristol Investments have taken significant steps in moving the company back towards profitability.
The company has made a recent announcement regarding a workforce restructure, which has involved the business entering into a collective consultation period with staff.
This will enable Fairline to right-size its operations to better reflect the marketplace environment, thereby permitting the business to operate efficiently. Regrettably this process is expected to result in a significant number of redundancies.
Nonetheless, it is a process entered into in the best interests of the business’ key stakeholders, namely the creditors and employees, in an attempt to safeguard as many British jobs possible, in both the present and the future.
Furthermore, Fairline has procured the services of turnaround specialists KSA who are assisting in the development of a complete and robust recovery and restructuring plan for the business.
This will involve the company proposing a Company Voluntary Arrangement (CVA) which, if agreed by creditors, will allow the company to restructure its debt and move forward with a sensible and manageable cost base.
Once the restructuring has been concluded, Wessex Bristol will turn its attention to implementing its long term growth strategy for this great British manufacturer.
Wessex Bristol remains committed to the long-term success of Fairline and will continue to develop the brand post reorganisation.
We are in the business of building the best hand-made, custom built British boats in the world and sincerely believe in our plans to ensure the long-term success of Fairline.