Heart of England Fine Foods liquidation enters the process. A business which specialises in the promotion of food and beverages in the West Midlands is set to undergo a creditors’ voluntary liquidation.
Set up back in 1998, the company was given public backing and financial support by the government to assist SME’s and has since gone on to generate £90 million in the Midlands, support 2,800 manufacturers in their industry and create and protect more than 2,000 jobs, though it has struggled in the past three years after a problems with the Shropshire Council and an extended period of stagnant trading.
Readying to enter into company liquidation
HEFF are now thought to be readying to enter into company liquidation after losing their six-year contract to run the Shropshire Food Enterprise Centre with the Shropshire Council, with the latter party arguing that the premature termination of their arrangement was based on the findings of a review they undertook to assess how well the company promoted their foods.
According to the review report, HEFF’s contract was discarded three years early because the council believed they had been “paying an excessive amount of money” for the service they were being provided.
Furthermore, the decision by the UK Trade and Investment (UKTI) government department to not provide HEFF with funding this winter to support the businesses international endeavours is thought to have concretised Shropshire’s decision to bring their partnership to a close.
The company’s shift to the Shrewsbury College of Arts and Technology back in March gave them hope of achieving survival in the long run, but it soon became apparent that it would not be able to keep trading in the immediate future because it simply hasn’t been able to attain the necessary level of income to compensate for the undelivered funding.
Unable to secure any additional sources of income
In a statement, HEFF said: “Despite valiant efforts, we have been unable to secure any additional sources of income from either the public or private sector.
“We believe the government is short-sighted in not recognising the added value HEFF brings to the food and drink industry and the contribution made to the economy through its activities.
“Whilst the immediate job losses at HEFF will be 15, the knock-on effect is likely to see hundreds of jobs within small businesses put at risk.”
The liquidation has meant that an expected 15 individuals will be made redundant in the upcoming weeks, though it is possible that hundreds of other people in the food and drink industry who were reliant on HEFF’s help will be negatively affected as well collateral consequence of the company’s demise.
Statistical analysis of the businesses financial documents suggest that it still possesses a healthy level of reserves, though it is the company’s trading performance which has contributed toward its plight, with consistent losses being posted in recent times.
HEFF’s board of company directors stressed that they had considered all options and assessed all potential measures they could have taken to save the business in the past few months, but identified that as of yet they have been unable to attain financial support to help their cause from neither the private or public sector.
A statement from the board read: “We do not genuinely expect we will be able to trade out of our current financial difficulties in the short term.”
In order to prevent allegations being levelled at them for Wrongful Trading, the company had no realistic alternative but to enter into a voluntary liquidation.
“While over the next quarter, we would have liked to wind the business up ourselves, unfortunately, this is not feasible due to cash flow issues,” they added.
A liquidator is expected to be assigned to the business following a meeting of their shareholder’s scheduled to take place on the 9th of July, and the company directors are optimistic that they will be able to find a solution prior to this event in order to turnaround the businesses fortunes and begin the long road to recovery.