Long-standing manufacturer in Portsmouth Formaplex goes through pre-pack administration deal
THE new owners of a manufacturer that employs nearly 500 people in the Portsmouth area has said that without its involvement the long-standing firm would have gone bust this year.
Formaplex, which supplies lightweight component solutions to the automotive, motorsport, aerospace, medical and defence markets, has seen a raft of recent redundancies, restructuring and a pre-pack administration this year.
The firm, which has four manufacturing sites in Hampshire – Voyager Park in Portsmouth, Access Point in Cosham, and sites in Horndean and Havant, was placed into administration last month, only to be bought the same day in a pre-pack deal by its owners, who have now created Formaplex Technologies.
It has been operating for more than 20 years. It was bought by UK private equity fund Elaghmore in February, which took the business on a period of restructuring that saw it shed 110 staff.
Andy Ducker, partner at Elaghmore, said: ‘While positive progress had been made, to secure the long-term future of Formaplex Ltd the business needed to take further steps to strengthen its balance sheet.
‘As a result, Formaplex Ltd was placed into administration as of July 8, 2021. We agreed to purchase the business and assets of Formaplex Limited from the administrators on the same day through a procedure known as a pre-pack administration.
‘There has been a seamless transition of customers and the 482 employees to a new business, Formaplex Technologies. We have secured the support of all the major customers, and a new, experienced CEO, Dominic Cartwright has been appointed to run Formaplex.
‘Elaghmore has committed significant funding to ensure the future of Formaplex, and grow the business.’
Prior to joining Formaplex, Mr Cartwright was CEO at Garner Aerospace, an international manufacturer components and aerostructure assemblies for the aerospace and defence markets. He has also held senior positions at TT Electronics, Prodrive and United Technologies.
He said: ‘Having restructured the business, Formaplex is in a strong position to focus on delivering its strategy for growth. I am looking forward to leading the innovative and highly-skilled Formaplex team as we continue to deliver our lightweight component solutions to industries and companies around the world.’
However a message sent out from the firm to suppliers, dated July 16, which The News has seen, said there had been more to the pre-pack administration.
It said: ‘As you may know, Elaghmore acquired Formaplex Ltd in February, but it has become clear that, despite due diligence, the financial position of the company was misrepresented and as a result the unaudited historic trading information and forecasts were inaccurate to a significant degree.
‘If this was known pre acquisition, then Elaghmore would not have acquired this business solvently and the business would have failed in early February.
‘Since acquisition and as pre acquisition issues became apparent, Formaplex Ltd has been loss making, yet it has endeavoured to protect its trade suppliers’ position by not increasing their exposure of unpaid debt – in fact, the position has reduced due to Elaghmore’s investment.
‘To ensure the business can continue to trade going forward, it is necessary, to carry out a financial restructuring to strengthen the balance sheet and present a stable, viable platform upon which the business can grow.’
And the disruption has affected the work place, according to insiders.
One said: ‘The reality is most of the best staff have left. As you can see from reviews on Glassdoor, it is an unhappy place to work.’
Several one star reviews have been left on Glassdoor, a website where current and former employees anonymously review companies, in the past year.
However a spokesman from Elaghmore said these were not reflective of the current situation as they were all before the new CEO had taken over – and only two had been posted since Elaghmore took over.