[Uploaded to BikeBiz.co.uk on 8th October]
The deputy editor of Financial Mail on Sunday, the meaty supplement to the 2.2 million circulation Mail on Sunday, wont let this story go.
While Lenark directors are still slammed, Lisa Buckingham has now turned her attention to the motives of the US-based, US-financed Derby Cycle Corporation.
Derby, says Buckingham, is suffocating under debts, with benchmarking agency Standard & Poor downgrading Derbys credit rating effectively raising a red flag to those doing business with the firm.
Earlier in the piece, Buckingham quotes Alan Simpson MP of saying Derby is guilty of selling the kids to pay off the gas bill.
Now factory sale poses threat to bike firm Raleigh
By Lisa Buckingham
The American company that triggered the collapse of Sturmey Archer by
selling its factory is also selling the manufacturing site of major British bike maker, Raleigh for millions of pounds.
Derby Cycle Corporation, which is under huge financial strain, has
signed a four year contract to sell the freehold on the Raleigh site in Nottingham. The factory stands on the other side of Triumph Road from Sturmey Archer, which sank into liquidation last week.
The money from both sales has already been earmarked to help pay some
of Derby’s crushing £270 million debt. Local Labour MP Alan Simpson, who has been campaigning on Sturmey-Archers behalf, described Derbys actions as akin to selling the kids to pay off the gas bill.
The latest deal means Raleigh will be forced out of its present factory. It was just such a deadline which precipitated the crisis at Sturmey whose new owners did not have the money for a down payment on new premises.
One Raleigh manager, who used to work for Sturmey, said: Everyone is
really nervous. They (Derby) own a lot of bicycle companies and I should
think they’re all quaking at the moment with what happened to Sturmey
Derby took the money for the sale of Sturmey Archer’s land and money for the sale of our land. It would be interesting to see how secure their financial footing is.
In a quarterly trading statement posted on the internet, Derby admits
it is suffocating under the weight of its debts. It says: There can be no assurance that the company will be able to generate cash flow from operations that is sufficient to service its (debt) obligations.
The financial SOS from Derby comes as the American group is being forced
to pick up more than £700,000 of liabilities relating to the collapse of
Bob Ykiah of credit rating agency Standard & Poors has just downgraded its estimate of Derby, effectively hoisting a red flag to those doing business with the firm.
This is prompting liquidators to examine whether Sturmey was solvent at when it changed hands for £30 earlier this summer.
Meanwhile it has emerged that a Lenark director, Clive Walton, is being investigated by Customs & Excise over other business dealings.
In a root and branch inquiry the Department of Trade and Industry is monitoring the growing list of company failures associated with Simon Allso, an associate of Lenark who cannot be a director as he is a bankrupt.
It is understood that the DTI will widen its investigations to take in other
Lenark directors who last week gave up their fight to keep Sturmey Archer out of liquidation.
Financial Mail has established that customs officials are looking into the collapse of Nationwide, a car hire business run by Walton which was based in Uckfield and which failed last year with unsecured debts of £4.6 million.
A senior manager at one of Nationwide’s suppliers said he had received
a surprise visit from VAT inspectors interested only in receipts and
invoices related to Nationwide.
The owner of the company said he was among a ‘score of local
companies’ who lost money when Nationwide went into liquidation last
January only to see Walton re-open in exactly the same unit of Bellbrook Business Park the next day.
At a creditors meeting in Brighton, Walton was accused of having known for months that Nationwide was a ‘hospital case’.
Edward Head, the Nationwide liquidator, told Financial Mail: He made some decisions of questionable timing, especially in the latter part of the company’s history.’
One former director of Lenark companies, who could now face personal bankruptcy said: I have no plans to talk to any of them (Lenark directors) again. I just want to get on with my life.
Walton, who lives with his girlfriend and who former associates describe as ‘a bit of a ladies man’, was not involved in the final stages of trying to keep the business out of liquidation even though he was one of the driving forces behind Lenarks purchase of Sturmey Archer.
The furious confrontation with Sturmey Archer’s creditors, including
employees with decades of service, was at was left to his co-director, Barry Robinson, a Las Vegas resident who lists his occupation as gambling.
Robinson, whose homes include a ranch-style villa in Lady Thatcher’s
home town of Grantham, has claimed that he believed Sturmey Archer had assets of £9 million and liabilities of only £2 million at the time he and his Lenark associates bought it.
He has told insolvency experts that he became a major backer of Lenark
and Sturmey Archer as he is a long time associate of Allso.
Allso, who is described as a financial analyst for Lenark, is believed
to be still in touch with Robinson but other executives and insolvency practitioners trying to salvage something from the Sturmey Archer affair have not been able to contact him.