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Thu May 23 2024

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Burdens nears deal on restructuring

19 Oct 12 WT Burdens, the long-established builders’ merchant group, expects to complete a restructuring next week by selling part of the business to secure its future.

The company says that completing the transaction has been made complicated by its employee co-ownership model. Ownership of the company is shared between the original founding family, a charitable trust and all employees.

Since going public on a strategic review of the company structure a couple of weeks ago, nervous creditors had made life difficult for the company, corporate development director Kevin Hancock said. “We have been under pressure over the past couple of weeks working with our existing arrangements while a strategic review was going on.”

The company has taken the precautionary step of serving notice of appointing an administrator, but has no intention of actually going into administration, Mr Hancock said. The business “just needed breathing space while a transaction is carried out,” he explained.

The £330m turnover business secured a refinancing deal with GE Capital and Lloyds Bank as recently as February. Chief executive Jeremy Burden said at the time that the package was to support anticipated further growth, following a 15% rise in sales in 2011/12.

Burdens remains family-run after more than 80 years in business and all employees own a share in the business.

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The Twittersphere has been rife with rumours this week about Burdens going into administration. The company responded by Tweeting: “It’s public knowledge that we are going through a restructure which has been communicated formally to all our trading partners.”

Mr Hancock told The Construction Index: “We are very close now to a transaction.”

He was not in a position to give details of the deal, but indicated that one or more of the 20 or so companies within the group would be getting a new shareholder or shareholders.

The company is widely recognised for its ethical stance on corporate, environmental and safety issues, and its employee co-ownership business model. Only yesterday it featured in The Independent newspaper as winner of the 2012 Peer Award for Philanthropy.

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