Jobs lost as engineering group prepares to wind-down | TheBusinessDesk.com

A castings and engineering group has made its workforce redundant after facing pressure from creditors and its bank.

Chamberlin and Russell Ductile Castings employed 129 staff across its operations in Walsall and Scunthorpe when it appointed administrators at FRP. A few staff remain to assist FRP with the wind-down of both businesses.

The foundry operator was hit with a winding-up petition from its main power supplier, leading to shares being suspended from trading on AIM on May 7.

Chamberlin confirmed in a trading update on May 12 that it was unable to secure additional “funding of the scale and form required for ongoing business stability”.

Despite cost reduction actions and wholesale customer price increases implemented across the group, the group had a lack of liquidity to keep it above water.

CEO Kevin Price said: “Following the Company’s announcement on 7 May and the subsequent discussions with creditors, customers and shareholders, we do not have a funding solution that provides the necessary liquidity in the time we have available.

“On behalf of the Board, I express to our staff, shareholders and all other affected stakeholders our deepest regret that we are having to take the very difficult decision to commence an insolvency process.”

The underlying demand for Chamberlin had been lower than expected in Q3, with lower sales also negatively affecting profitability and working capital. To tackle the challenges, price increases as well as a cost-cutting strategy were implemented but this resulted in the share price dropping.