Silentnight hopes rescue deal will save 1,250 jobs

EMBATTLED bed-maker Silentnight is hoping to secure a rescue deal to save the company and around 1,250 jobs after running up a £100 million hole in its pension fund.

The Lancashire-based firm has applied for a company voluntary arrangement (CVA) to help it avoid administration after it claimed that its lender had pulled the plug on its banking facilities.

The family-owned group, which was founded in 1946 and supplies around half a million beds a year to retailers, is seeking to transfer its onerous pension scheme into the hands of the Pension Protection Fund and is asking creditors to accept less than they are owed. Silentnight employs about 650 staff and chief executive Neal Mernock said the company was "trading profitably and generating cash", but he added: "The withdrawal of our facilities by our formerly supportive lender this year has left us with an unserviceable level of historic debt".

Clydesdale Bank sold its debt in Silentnight to a third party in February but continued to provide "day-to-day" banking facilities to the firm.

The firm is facing a deficit in its pension fund of around 100m, which has mounted as a result of a series of acquisitions made during the 1980s and 1990s.

Creditors will be asked to vote on the CVA on 6 May.