PoleStar Okehampton calls in the administrators

While the business is not being sold as a going concern but as an asset sale, Phil Armstrong from joint administrator FRP Advisory said: “We are now working towards an outcome where a buyer can be found for the operation, in the hope that some staff can be re-employed under new ownership."​

While PoleStar's other factory at Leamington Spa went into administration, staff at Okehampton had believed that their jobs were secure after Privet Capital​ - an expert in ‘turnaround private equity funding solutions’ - stepped in late last year to buy the site.

However, just two months after Privet director Ian Astley said its intervention would ​provide PoleStar with a "renewed focus, increased financial strength and a clear strategic plan", ​232 staff were informed that due to "unforeseen problems"​, they were being made redundant​.

Cashflow problems​

Armstrong said: “PoleStar Foods and Okehampton Desserts have been in difficulties since their formation in December 2009 and, indeed, the companies were struggling under their previous ownership. Unfortunately, the restructuring of the business was not sufficient to ultimately solve the companies’ cashflow problems.​
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“The companies unfortunately did not represent a viable purchase as a going-concern. The directors, therefore, sadly had to make 232 employees at the Okehampton site redundant on February 1. ​

"Our employee specialists, together with a local Job Centre team, will be on-site this week to advise all staff members on their best route back into employment and assist with their claims from the Redundancy Payments Office."​

A spokeswoman for Privet Capital added: "Despite extensive efforts to turn around a business which had been in difficulties under previous ownership, the restructuring since our acquisition of Polestar Foods in November was not sufficient to ultimately solve the Company’s cashflow problems. ​

"Regrettably therefore, administrators were appointed ... The administrators FRP Advisory will seek a buyer for the operation in the hope that the factory can resume production and re-employ some staff under new ownership."​

 Heinz exit​

PoleStar, which supplies supermarkets with own-label desserts and Heinz branded products under licence, was formed in December 2009 following the acquisition of Heinz’s UK frozen desserts business, with financial backing from Bank Leumi (UK) plc.

 It operated from two sites, in Leamington Spa in Warwickshire and Okehampton in Devon.

 The firm, which had cashflow problems from the beginning, hit the headlines​ last autumn after FoodManufacture.co.uk revealed that chief executive Keith Ellis had stepped down following disagreements with the chairman and board.

Interested parties should contact Anthony Simmons and Steve Beattie, FRP Advisory, on +44 (0) 203 005 4000​​