UK service centre Barrett Steel is proposing to close the Rugby distribution site of the previous Aartee Bright Bar business, and is also likely to stop the Bright Drawing business at Willenhall.
Barrett bought Aartee Bright Bar and Aartee Bright Bar Property from administration for around £13mn ($16mn) at the end of March. Since then it has discovered that a lack of planned maintenance and investment under the previous owner left the assets in a "very poor state", with approximately half of the lifting equipment being condemned amid safety concerns. Aartee Bright Bar was owned by Ravi Trehan, who has now sold the overriding Aartee business to his long-time associate Sanjeev Gupta. Before it fell into administration, Aartee Bright Bar's main lender, FGI, found several breaches of its receivables purchase agreement.
Since entering administration on 6 February, Aartee Bright Bar effectively ceased trading, meaning it has lost customers to alternative supply routes. Barrett is "proposing to restructure the shape of the acquired business in line with current trading levels", according to a notice sent to Argus.
Barrett said allowing employees to work on dangerous and potentially injurious equipment could not be tolerated.
The company is also looking to amalgamate the Sunderland office into Consett and is entering a consultation period with all affected employees. At other distribution sites, including Bolton and Newport, it will be reviewing manning levels and shifts.
It also said the administrators, Alvarez & Marsal, had surrendered Bright Bar's HGV O Licence, which is needed by businesses that have vehicles that carry over 3.5t of goods.
