Every hour that went by without Hewlett being sold “was reducing the chances of the business surviving”, its managing director has told CN in an exclusive interview.
Administrators from BDO put Yorkshire firm Hewlett, one of the UK’s biggest private engineering firms, up for sale after it hit financial difficulties “as a result of the challenging economic climate”.
Mr Cooper, who said he had not slept for 40 hours when he spoke to CN this afternoon, said: “The first we knew about it is there were faxes down in the open area of the offices on another floor of the building from the banks demanding immediate repayment.
“Within a short time, we had some more faxes from the administrators, telling us that they had been appointed.
“So we made some calls very quickly to our bank to say ‘what are you doing, surely we can talk to you about this?’
“But once it’s been to the court you can’t turn the clock back, and before too long everyone knows – and within the construction sector, it’s very difficult to operate with anything like that that’s become public knowledge.
“Our biggest fear was the damage it was doing to a good business. Every hour that went by without it being bought by someone was reducing the chances of the business surviving.”
Mr Cooper and two other group directors have now formed a new company, Hewlett Construction Ltd, which encompasses the old civil engineering, rail and plant and training businesses.
Former owner John Duffy remains with the firm in a consultancy position.
Mr Cooper said the company has now pulled out of housing altogether, with Portford Homes, which had been the root of the debt and made a loss last year, left in administration. The group made a £0.7m profit in the year to March 2012, with net debt of around £1m.
He said the company has already negotiated transferring a number of contracts across to the new company.
The firm had around 24 live sites on Monday, which all had to down tools. But Mr Cooper said he expects “quite a few of them” to be back to work this coming Monday, and is working to get them all operational in the next 10 to 14 days.
Hewlett was working on Birmingham New Street station, contracts for Network Rail in the Midlands and the North, a gas storage site in Cheshire and an MoD job for soldier accommodation in Yorkshire.
He said he could not disclose what was paid in the MBO, how much debt the company owed or what was owed to creditors on Monday.
Asked about the creditors that will be out of pocket, Mr Cooper said he did not know how much the company owed at the time and that it was now a matter for the administrators, BDO.
He said: “It’s been very disappointing and does not sit comfortably with me that there are people in our supply chain that would have suffered from the actions carried out on Monday.”
He added: “We have still got to repair some of that damage, both with clients and suppliers.
“Our supply chain is very important to us. We know we have got to build up that reputation again, but I’m very confident in the team we have got.”
Mr Cooper said the debt problems at the £40m turnover firm dated back to the housing crash, after Hewlett entered the market in 2004 and was stung by the downturn as values collapsed.
He described Monday as a “black day”. “We have been here for 20-odd years; most of the people that work here are friends more than anything,” he said.
“Personally, it was a massive blow. Monday was an awful day. It was a black day for us.”
He said Tuesday was about trying to come up with proposals to fund a new business that could take on the assets, staff and resources, while trying to find best value and be able to service clients.
Mr Cooper, who has been with the firm for 20 years and the MD for 10, said the major concern was the security of staff and suppliers.
He spoke generally about how banks are moving too soon on companies to recover debt is an ongoing problem.
“There’s a big pressure for all the banks to get the money in to get themselves the liquidity ratio that they need,” he said.
“It’s all about getting cash in; there’s no attempt to support, not for the long term anyway.”
Mr Cooper said traditional banks “are just not interested in funding construction businesses”. “It’s very frustrating – and certainly leaves a sour taste,” he added.
But he said Hewlett is “very much in business and there as a long-term force”.
Speaking about the reaction of staff at the news of the MBO, he said: “It’s been very nice to see, after seeing people’s faces and all the concern and uncertainty that was so obvious on Monday – and to be fair it was on me as well.
“I did not know what would be happening on Tuesday, whereas today I have been to a couple of our locations to speak to people personally, and it’s nice that everyone’s there and raring to go.”
The firm has seven directors for the construction business, along with a plant hire firm, training division and Middle Eastern business.