A LAST-DITCH rescue bid for delivery firm City Link failed yesterday with the loss of 2,356 jobs.
Administrators, who took over the business after it collapsed on Christmas Eve, said an unnamed consortium’s offer was not acceptable.
CONNECT WITH THE SCOTSMAN
• Subscribe to our daily newsletter (requires registration) and get the latest news, sport and business headlines delivered to your inbox every morning
The possible buyer “offered no money up front and significantly undervalued the assets to be acquired,” they said.
Coventry-based City Link employed 2,727 people and suffered years of losses.
The administrators, from Ernst & Young, said they had proposed an alternative structure to the consortium “that would be acceptable and common in these situations. The consortium, despite attempts to make them reconsider, declined to amend their original offer”.
Just over 370 City Link staff have been kept on to deal with the parcels that remain at City Link depots and help run down the business.
Mick Cash, general secretary of the RMT union, disclosed that he had been told of “a credible bid to take over some or all of the City Link trading operations”.
The manner and handling of City Link’s collapse have been criticised, including by two Conservative MPs.
On Monday, Jon Moulton, founder of Better Capital, the investment firm which owned City Link, apologised for the impact on staff but said there was no alternative but to put the loss-making business into administration.
Hunter Kelly, one of the administrators, said in a statement: “It is with regret that we have to announce substantial redundancies at City Link Limited, which ceased accepting new parcels on 24 December 2014.
“The company endured substantial losses, which ultimately became too great for it to continue as a going concern.
“At meetings across City Link Limited’s UK sites on Monday 29 December 2014 and Tuesday 30 December 2014, employees were informed that there would be substantial redundancies as no new business was being taken on.
“Many of these employees were sent home, and informed that they would shortly receive formal correspondence to confirm their work status,” he said
SCOTSMAN TABLET AND IPHONE APPS