Wednesday, February 04, 2009
MBO saves Kia's star dealer group
"Wilson said that in circumstances like these it was usually best to reduce the scale of the business, and to stay with the original backers. "
Westdrive Automotive Group – Kia’s second best dealer in a global proficiency test in 2005 and its biggest in the UK – has been forced into administration because of mounting debts after ill-fated expansion.Growth had enabled Westdrive to increase its turnover to £20 million by December 2007, but its collapse left debts totalling around £870,000, according to administrator Baker Tilly.Owner Jason Westwood and his backers have now executed a management buy-out from Baker Tilly, safeguarding 20 jobs at its Braintree base, near Chelmsford.
The new business has debts relating to Braintree, but is relieved of other debts run up by satellite points at Edmonton and Romford in north and east Greater London, now closed.Mark Wilson, partner at Baker Tilly, Watford, said: “Westdrive expanded at the wrong time and ceased to be viable. It struggled to make money and was then caught by the economic downturn. In December the directors realised they needed to call in administrators.”Wilson said that in circumstances like these it was usually best to reduce the scale of the business, and to stay with the original backers. Westwood declined to talk to AM but told an Essex newspaper that administration ”was a process that we had to go through to make sure we could hold on to what is a successful dealership.” Stephen Kitson, Kia UK spokesman, said: “Westdrive moved into an area where it found rents and rates were astronomical. This put a strain on the business. Jason Westwood took action to protect the Braintree core of the business, and has had our support throughout.”Westdrive would continue to be an integral part of Kia’s planned sales expansion in the UK, he added. Around 15 dealers would join the network over the next few months, some replacing outgoing retailers. There were no immediate plans to fill the Romford and Edmonton points.The latest Kia dealership to collapse is Aln Motor Company in the north-east.
The failure is believed to be linked to problems with Aln’s fuel station business.
DATED: 04.02.09
FEED: AM
Westdrive Automotive Group – Kia’s second best dealer in a global proficiency test in 2005 and its biggest in the UK – has been forced into administration because of mounting debts after ill-fated expansion.Growth had enabled Westdrive to increase its turnover to £20 million by December 2007, but its collapse left debts totalling around £870,000, according to administrator Baker Tilly.Owner Jason Westwood and his backers have now executed a management buy-out from Baker Tilly, safeguarding 20 jobs at its Braintree base, near Chelmsford.
The new business has debts relating to Braintree, but is relieved of other debts run up by satellite points at Edmonton and Romford in north and east Greater London, now closed.Mark Wilson, partner at Baker Tilly, Watford, said: “Westdrive expanded at the wrong time and ceased to be viable. It struggled to make money and was then caught by the economic downturn. In December the directors realised they needed to call in administrators.”Wilson said that in circumstances like these it was usually best to reduce the scale of the business, and to stay with the original backers. Westwood declined to talk to AM but told an Essex newspaper that administration ”was a process that we had to go through to make sure we could hold on to what is a successful dealership.” Stephen Kitson, Kia UK spokesman, said: “Westdrive moved into an area where it found rents and rates were astronomical. This put a strain on the business. Jason Westwood took action to protect the Braintree core of the business, and has had our support throughout.”Westdrive would continue to be an integral part of Kia’s planned sales expansion in the UK, he added. Around 15 dealers would join the network over the next few months, some replacing outgoing retailers. There were no immediate plans to fill the Romford and Edmonton points.The latest Kia dealership to collapse is Aln Motor Company in the north-east.
The failure is believed to be linked to problems with Aln’s fuel station business.
DATED: 04.02.09
FEED: AM
