Company appoints Deloitte to advise on investment options

 

 

Ballymena-based bus manufacturer Wrightbus has appointed financial advisors Deloitte to find potential investors. It is understood that this could also ultimately lead to a sale.

A number of turnaround funds have been approached to canvas their interest in ploughing tens of millions of pounds into the family-owned company, city insiders told Sky News this week.

The status of talks with potential bidders remains unclear, although a source close to the process insisted that Deloitte was working on “restructuring” options.

Passenger Transport understands that the business has been suffering from significant cashflow issues in recent weeks as a result of a downturn in new bus orders from UK operators. That had already led to two rounds of redundancies last year with 95 jobs axed in February and June and a number of agency staff laid off.

But now the cashflow issues are now believed to be leading to problems with the manufacturer’s supply chain. A number of bus operators have reporting difficulty in obtaining spare parts in recent days and in at least two cases industry sources have reported the situation has become so acute that they have bypassed Wrightbus to obtain parts directly.

One manufacturing insider also claimed that the cashflow issue had been caused by two fundamental problems

One manufacturing insider also claimed that the cashflow issue had been caused by two fundamental problems – a “significant” bus order from a UK operator where the vehicles have been handed over by Wrightbus but payment for them has yet to be received and also a large order for vehicles from a bus operator in the Far East.

In that case it is understood that Wrightbus initially planned to produce the vehicles in Malaysia but this was switched to the firm’s main manufacturing facility at Ballymena as orders for the UK market began to dry up over the last 12 months or so. The insider described this decision as “extremely unusual” as it would have added “substantial labour and shipping costs” to what was a “very tight” fixed price contract.

In a statement Wrightbus said it had appointed Deloitte to “explore the potential of bringing on board an investor”.

“This is to ensure that the skills and talents of our Ballymena workforce continue to deliver cutting-edge transport vehicles to our customers near and far,” the company added.

“The company continues to win new business and this is evident in the recent uptake of our zero emission fuel cell
vehicles bolstering a strong 2019 order book
.”

 
This article appears in the latest issue of Passenger Transport.

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