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Talks could save Lowestoft jobs

PUBLISHED: 11:00 13 May 2010 | UPDATED: 17:20 06 July 2010

NEARLY 600 jobs at troubled Lowestoft engineering firm SLP could be saved after a Dutch energy group signalled its intention to buy the business.

Administrators at PriceWater-houseCoopers (PwC) confirmed they had entered exclusive talks with Zefier UK II, a subsidiary of Dutch-based Smulders, with a view to completing the sale of SLP.

NEARLY 600 jobs at troubled Lowestoft engineering firm SLP could be saved after a Dutch energy group signalled its intention to buy the business.

Administrators at PriceWater-houseCoopers (PwC) confirmed they had entered exclusive talks with Zefier UK II, a subsidiary of Dutch-based Smulders, with a view to completing the sale of SLP.

SLP went into administration last November after becoming embroiled in a $91m (£60m) legal claim by Danish conglomerate Maersk relating to a previous contract in Qatar, leaving hundreds of workers facing an uncertain future.

Zefier yesterday acquired SLP subsidiary Sea and Land Power and Energy (SLPE) - the company's energy arm - securing 17 jobs.

And while no final agreement has yet been reached, Zefier now has an eight-week “exclusivity period” in which to hammer out a deal on the engineering business, which forms the vast bulk of the SLP.

It is hoped the two divisions can be sold to the same buyer.

While only a comparatively small company, SLPE is seen as key to the future success of SLP, pulling in work from the huge expansion in offshore wind power.

Sites, including the East Anglia Array off the region's coasts, are set for thousands of turbines under Round Three of the national roll-out of offshore windfarms, which are set to make a major contribution to the UK's energy needs.

Despite the positive signs, Stephen Oldfield, of PwC, said 60 SLP workers would be made redundant during May as work on existing contracts dries up, with further job losses possible. About 100 jobs were also lost in March.

And Mr Oldfield warned nothing was certain until the sale of the main part of the business was completed.

He said: “This is good news. What it means is there is a genuine prospect of securing a sale of the combined energy and engineering businesses in Lowestoft, in the right place and at the right time to take advantage of the growth in offshore wind in the Southern North Sea.

“There are 60 redundancies planned for May, which the employees concerned and the unions have been kept fully aware of.

“The employees leave with their full contractual entitlements.

“Whether there will be further redundancies depends on the timing of the sale of the business and the completion of work in progress.”

He added: “We have stressed that nothing is certain until a deal is done and, until that time, business will continue as normal on the Lowestoft yard.

“The key is to get a new owner to start the process of refilling the order book to rebuild the business back to historic levels as soon as possible.

“The Smulders exclusivity agreement is a positive step towards that.”

The sale of SLPE marks the first move into the UK market by Smulders, a group of 15 businesses specialising in various aspects in steel processing, including in the wind power industry.

Founded in 1966 in the Netherlands, the group employs more than 1,000 across Europe, including in Poland, Portugal and Belgium.

Albert Smulders, chief executive of the group, said: “The acquisition of the business and assets of SLPE is a first, but important step, into the UK by the Smulders Group.

“We are a committed supplier to the wind energy business in Europe and aim to expand our activities in the UK as well.”

Maersk's legal claim against SLP related to a contract to build accommodation modules for rigs in Qatar in 2006.

Jobs were temporarily secured after the appointment of PwC as administrators last year as BP agreed to allow SLP to complete work on a major contract.

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