Background

The business operated as a spirit labelling manufacturer servicing primarily the Scottish whisky industry. The business commenced trading in January 2024, following multi-million-pound investment into the fixed assets and facilities. Whilst the Company in its short trading life had built strong relationships with a number of key customers in the Scottish whisky sector, demand was significantly lower than expected due to a downturn in the global whisky market, driven by reduced demand from China and Asia. As a result, the sales achieved fell significantly short of budget. Accordingly, the Company was forecasting a significant funding requirement during late 2024 into early 2025 to maintain operations. In response, the directors explored external investment options and the possibility of a solvent sale. However, they were unable to reach terms acceptable to all directors. Attempts to secure additional funding also proved unsuccessful.

Action

FRP were engaged by the Company to undertake marketing of the business and assets via an accelerated sale process, with a view to securing a sale immediately following the Company being placed into Administration. Throughout the process, the team worked closely with the Company and its directors, engaging with a number of potential buyers and key creditors. A critical challenge involved negotiating with creditors, as many of the principal operational assets were financed through leasing arrangements.

Outcome

FRP successfully maximized the value of the business and completed the sale within one month of the engagement letter being signed. A deal to purchase the Company as a going concern was agreed, with all 16 staff members transferring to the new owner through the TUPE process. This swift resolution ensured business continuity and job security for the workforce while securing a positive outcome for stakeholders.