Manufacturing company insolvency and rescue

Manufacturing companies carry heavy fixed costs and are highly exposed to energy and raw-material prices, so margin can vanish quickly when input costs rise faster than a manufacturer can pass them on to customers under existing contracts. Plant and machinery tie up capital and are often financed, work in progress and stock absorb cash, and a single large customer can represent a dangerous concentration of risk. When pressure builds, manufacturers frequently face both trade-creditor and HMRC arrears at once. Because manufacturers usually hold valuable assets, plant, machinery, stock and sometimes premises, the rescue and closure options can be more nuanced than for an asset-light business: there may be value worth preserving through administration or a going-concern sale, and asset values affect what creditors can expect in a liquidation. If your manufacturing business is in difficulty, a Licensed Insolvency Practitioner can assess whether the business or its assets are best preserved through a rescue, a sale, or an orderly wind-down.

Energy, inputs and fixed costs

High energy and raw-material costs against fixed contract prices squeeze margin fast. Heavy financed plant and concentrated customers add risk. The result is often combined trade and HMRC arrears.

Assets change the options

Valuable plant, stock and premises mean there may be value worth preserving through administration or a going-concern sale, rather than a straight liquidation.

Common questions

What happens to plant and machinery in an insolvency?

Owned plant and machinery are assets the practitioner realises for creditors, often through sale; financed equipment is dealt with by the finance provider. Sometimes the assets are sold together as a going concern in an administration.

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Manufacturing company insolvency and rescue. Manufacturing companies carry heavy fixed costs and are highly exposed to energy and raw-material prices, so margin can vanish quickly when input costs rise faster than a manufacturer can pass them on to customers under existing contracts. Plant and machinery tie up capital and are often financed, work in progress and stock absorb cash, and a single large customer can represent a dangerous concentration of risk. When pressure builds, manufacturers frequently face both trade-creditor and HMRC arrears at once. Because manufacturers usually hold valuable assets, plant, machinery, stock and sometimes premises, the rescue and closure options can be more nuanced than for an asset-light business: there may be value worth preserving through administration or a going-concern sale, and asset values affect what creditors can expect in a liquidation. If your manufacturing business is in difficulty, a Licensed Insolvency Practitioner can assess whether the business or its assets are best preserved through a rescue, a sale, or an orderly wind-down.

Help for a manufacturing business in difficulty

Tell us briefly what is happening and we will arrange a free, confidential, no obligation call with a Licensed Insolvency Practitioner. The earlier you get advice, the more options you usually have.

Free, confidential and no obligation. We are an independent information service and introduce directors to a Licensed Insolvency Practitioner. This is general information, not regulated advice.