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Severfield-Rowen to put £3m into Atlas Ward

FINANCE No redundancies promised as steel firm is snapped up by larger rival for £1.2m

SEVERFIELD-Rowen will invest up to £3 million in Atlas Ward after buying the ailing steel fabrication specialist.

Severfield is paying £1.2 million in cash for Atlas Ward, which is based at Sherburn near Scarborough.

John Severs, Severfield's managing director, said: 'The price looks cheap but we're going to have to spend £2 million to £3 million investing in the business.'

Severfield is carrying out due diligence and has until March 26 to make an offer but Mr Severs insists the deal is practically done.

He promised there would be no redundancies at the business, whose management have driven turnover down in recent years to try to make a profit.

Atlas Ward was mostly owned by Bank of Scotland, which is using City rules to force minority shareholders, including those from abroad, to accept the bid.

Mr Severs added: 'It's not a cripple at the moment but it's got to the point where it needs investment and a bank is not there to run a fabrication unit.'

Managing director Nigel Pickard and the rest of Atlas Ward's existing senior management team will remain in place.

Atlas Ward's turnover was £35 million last year but the most recent accounts available for the business at Companies House date back to 2002, when the workforce stood at more than 500 people.The 2003 results were due last October but Atlas Ward secured a three-month extension under a special rule allowing firms with foreign shareholders extra time to file results.

In 2002 Atlas Ward's pre-tax losses spiralled to £2.1 million from £446,000 the previous year.Turnover dived £12.4 million to £43.5 million and the group had net assets of just £742,000.