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Second Case dealer hit by financial difficulties

PLANT Saville Tractors facing uncertain future after death of Thornycroft chairman in shooting accident

CASE Construction Equipment has been rocked by serious financial problems at its second major dealer in five months following the death of one of the owners of its southern dealer Saville Tractors.

Saville was awaiting a decision on its future this week following the fall into administration of Thornycroft (1862), part of a consortium which bought Saville in July. The dealer had experienced cashflow problems and it was thought that its sale to Thornycroft had successfully restructured its debts.

But Thornycroft was forced to call in administrator BDO Stoy Hayward following the accidental death of its chairman and majority shareholder, Andy Ross, on September 2 while duck shooting in Scotland.

Saville was one of the companies given additional responsibilities by manufacturer Case in the wake of the collapse of its then biggest dealer, CRMS, in July.

But whereas CRMS was put into administration after Case's machine inance arm CNH Capital called in a major loan, the manufacturer was adamant that it had no such dealing with Saville this time.

A Case source said: 'We are as much a victim in this as everyone else. This is nothing like the CRMS situation. Saville is still within its 90-day credit window, so they have not been under pressure to repay credit.'

Huntingdon-based Thornycroft employs 20 staff and has a plant hire firm, Colchester-based Cadman (Contracts) alongside a number of plant-related businesses in the UK and abroad. Mr Ross was a one-time national speedway champion and the owner of a large Scottish estate.

The family-run group had a reputation for mounting rescue bids for firms in difficulty and Mr Ross was the director of nine other companies alongside the Saville group, so the administrators are expected to have to unravel a variety of business dealings.

In its abbreviated accounts, filed for the year to June 30 2004, Thornycroft showed pre-tax profit of £522,000 but current assets of £6.4 million were outstripped by £12.3 million due to creditors within one year. It also showed transactions with eight other companies under Mr Ross' family control.

The Cadman hire fleet, in particular, is thought to have left a number of creditors amongst manufacturers.

Shay Bannon, joint administrator for BDO, said: 'We have been appointed by the firm's remaining directors to provide some stability in the business, during the coming weeks as the family comes to terms with their tragic loss.

'We are conducting an immediate review of the business to establish the most appropr iate cou rse of act ion.'

Saville has so far avoided administration proceedings, since Thornycroft is only one partner in the consortium which owns the dealer.

Saville is a dealer for Case, Kubota, Neuson and Ausa and the British distributor for waste compactor firm Tana .

Case UK dealer development manager Rick Morris said: 'We have always had, and continue to enjoy, a very good financial relationship with the company, which we are maintaining in this period of possible change.'

But observers suggested that Case should have been aware of the precariousness of Thornycroft's financial situation. One said: 'To see one dealer falling into administration is unfortunate, to lose two seems likes carelessness.'

Case European Vp George Russell replied: 'Prior to finalising agreement with any new investor Case gives due diligence to assessing the investor through very reliable global financial institutes.'