Administrators are in talks with a potential buyer for historic Tyneside manufacturer Zentia, weeks after it collapsed with the loss of 170 jobs. The ceiling manufacturer closed its Gateshead operations in June after more than 101 years of trading, shocking the North East manufacturing sector.
Talks with unnamed buyer
Interpath administrators were appointed after Zentia faced severe challenges in the building and construction sector, including high energy prices and lower sales. The company, a former North East Business Award winner, employed staff across two Gateshead bases, producing suspended ceilings for distributors, contractors, architects, and interior designers.
Before administration, directors tried to secure a £6.5m cash injection from shareholders and explored selling the companies, but these efforts failed. Production ceased immediately, resulting in 170 redundancies.
Debts and assets
New documents show Zentia collapsed owing more than £45m. The statement of affairs for Zentia Ltd lists assets with a book value of £24m, including machinery worth £14m and inventory worth £9m. Estimated total assets available to creditors are £2.59m, while total debt is £45.9m, including £20m owed to creditors and £16m to unsecured creditors.
A six-page list details trade creditors owed around £4.56m, intercompany creditors of £7.4m, and pension creditors of £2.036m. A separate statement for Zentia Profiles Ltd reveals debts of £11.7m, with trade creditors owed £1.1m.
Potential deal
The report reveals an offer for the majority of the business and assets was received from a third party, with BNP Paribas Commercial Finance Limited, Aurelius, and Lloyds Bank Plc supportive. It states: "It is anticipated that we will agree heads-of-terms and enter into an exclusivity agreement with the third party over the forthcoming days and then look to progress the transaction to completion."
Administrators have now entered into an Exclusivity Agreement with a potential purchaser, aiming to close a deal in the coming weeks. Whether this leads to reopening the Gateshead plants and rehiring staff remains uncertain.
Background
The company, originally incorporated on 7 August 1925 as Armstrong Cork Company, was renamed from Armstrong Ceiling Solutions after acquisition by a German asset manager. The report notes significant headwinds since acquisition, including sales impacted by economic challenges in construction, downward pricing pressure, and increased production costs.
