PCB |
Coretec closes UK ops
Coretec Inc. is restructuring its UK operations, a move that includes the closing of its Biggleswade, Bedfordshire manufacturing site and the appointment of an administrator under Part II of the Insolvency Act of the United Kingdom to administer the winding up of the Coretec Limited, the Company’s UK operating subsidiary.
The Company will retain a sales and distribution centre in England to serve its numerous strategic accounts in the UK, Europe and South Africa.
Coretec will be working with its client base to transfer all existing contracts to its Denver, Cleveland and Toronto operations and will in future pursue additional opportunities in the UK, European and South African markets from its four North American facilities. As a result of the closure, the Company will record a charge representing the writedown of its net investment in the UK subsidiary in the third quarter. Management’s current estimate is that the writedown, while ultimately dependant on the amount of the Company’s realizable value of the UK
subsidiary’s liquidated assets, will not exceed $3 million.
“The cost structure with respect to manufacturing in the UK combined with the technological capability of our specific site as compared to our North American operations, are such that retaining a production presence in the UK, in our opinion, does not appropriately serve the needs of current or prospective clients. We are convinced that we can serve the UK, European and South Africa markets more effectively from our Canadian and US sites as well as through our offshore partnerships from the perspective of technology, time and cost. In fact, even while operating a subsidiary in the UK, the Company has continued to service many of its UK, European and South African customers with shipments either manufactured out of our Toronto facilities or from our offshore brokering initiative”, said Paul Langston, President and CEO of Coretec Inc.
Mr. Langston continued, “we do not take lightly the closing of this site, especially given the impact that such a manoeuvre will have on our employees and the local economy. However, given the increased market activity at our North American production sites and the uncertain operating environment in the UK, we believe that it is in the best interest of our shareholders to deploy our resources in environments where we can be assured a meaningful and ongoing return on investment”.
