Administrator rips up contract with Longbenton Foods over its 'continued inability' to pay up

21-Jan-2011 - Last updated on 08-Aug-2024 at 13:08 GMT

Longbenton Foods’ inability to raise enough money to complete its purchase of Northumberland Foods has left administrator Begbies Traynor with no option but to scrap its contract with Longbenton and sell the site's assets to someone else, it has claimed.

Begbies Traynor told FoodManufacture.co.uk: ”It is with regret that the administrators of Northumberland Foods Ltd and Amble Assets LLP have finally rescinded the contract to sell the assets of Northumberland Foods Ltd and Amble Assets to Longbenton Foods Ltd.”

While Longbenton had paid a deposit before occupying the frozen foods manufacturing site in Amble late last year and contracts had been exchanged in October, it did not come up with the money needed to complete the sale by November 22 – the scheduled completion date, said a Begbies Traynor spokeswoman.

Further extensions were granted, but Longbenton had proved unable to come up with the money, she added.

“Given Longbenton Foods' continued inability to raise the necessary funding to complete the transaction, it is appropriate to rescind the contract.”

Administrator eager to talk to other interested parties

As revealed by FoodManufacture.co.uk earlier this week, Begbies Traynor is now selling the plant, machinery and property at the site via auction.

“It is hoped that a purchaser can be found who is able to recommence production in Amble and the administrators are eager to talk to any interested party and will work with the council in the hope that the jobs which the business previously provided can be restored.”

The auction is due to close at 12pm on Wednesday February 23, said auctioneer Sweeney Kincaid.

The sale is the latest chapter in a saga that has seen the factory close in early December, open again briefly on December 20, then close again four days later as Begbies Traynor locked it up.

Turbulent past

Frozen vegetable maker Northumberland Foods, which used to trade as Cheviot Foods, was bought out of administration in February 2009 by its management, with additional financial backing from Northumberland County Council, regional development agency One North East and the Royal Bank of Scotland.

However, administrators were called in again last August when things came to a head after months of cashflow problems. North Tyneside-based Longbenton Foods - formerly owned by Findus - then stepped into the breach in the autumn, with the site reopening under the Longbenton banner in November and re-employing 70 of the 250 staff that previously worked at the site.

Longbenton Foods' owner Geir Franztzen was unavailable for comment as this article went to press.