Members of the CovPress pension scheme have been saved from entering the Pension Protection Fund as the company’s new owners have agreed to take on the scheme.

CovPress, a professional metal stamping and robotic assembly specialist, entered administration in September 2016 but has now been purchased by Liberty House, securing 740 jobs as well as the pension scheme. It is the first time a company that has entered into administration has been rescued from the PPF by its new owners.

Grant Thornton partner Eddie Williams, which was joint administrator, said that CovPress is a “fundamentally strong business”.

“The successful sale to Liberty not only provides a secure future for this pivotal Midlands engineering enterprise but means the administrators should also have funds available to distribute to creditors.

“In particular I would like to thank Liberty, and ITS as the pensions scheme trustee, and all their advisors for working constructively alongside the Grant Thornton pensions team and our advisors on the transfer of the pension scheme as part of this sale. This has avoided the scheme passing into the PPF through an ongoing employer, which we understand has never been previously achieved for a business in administration. This has been pivotal to the outcome of the administration."

In addition, LCP pension specialist partner Timothy Sharples who advised Liberty House said: “LCP was able to help Liberty House to assess whether the potential advantages from the purchase would be sufficient to cover the additional risks that the business would have from the pension scheme. The solution is a good outcome for all the parties concerned; particularly the members of the pension scheme who can now look forward to receiving their benefits in full rather than reduced benefits from the PPF.”

Liberty Industries Group, part of Liberty House Group, which already has 17 engineering businesses employing over 1,000 people across the West Midlands, regards the CovPress acquisition as a strong strategic fit with its established and rapidly-expanding presence in the automotive supply chain.

The CovPress plant in Canley, Coventry is a supplier to Jaguar Land Rover, Renault and GM. The business, which will be renamed Liberty Pressing Solutions, has existed on the Canley site for 120 years. It has benefited from major investment in the latest plant and machinery since being acquired by the previous owners in 2013 and its engineers have established a strong reputation for devising innovative design solutions for customers.

In addition, ABN AMRO Commercial Finance will be providing financing via an asset-based facility. The bank is a key player in invoice finance and asset based lending across Europe with presence in the UK, France and Germany, alongside its original Dutch footprint.

Referring to the latest acquisition, Liberty Industries Group chief executive Douglas Dawson said: “We are very familiar with the high quality of the operation at CovPress and the skills and equipment in the business. As such we are extremely pleased they are becoming part of the Liberty Industries Group.

“We have drawn up a detailed plan to ensure the future sustainability and profitability of the business. That will include ongoing capital investment, strengthened financial management and the benefits that will come from joint purchasing and marketing with our other operations in the UK,” he added.

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