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East Lancs acquired from administrators

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EAST Lancashire Coachbuilders has new owners and new management. The Blackburn-based company called in administrators Begbies Traynor on Friday afternoon, allegedly because no buyer was prepared to take over the business as a going concern. Within hours of going into administration, the goodwill and assets of East Lancs parent company British Citybus, which includes North West Bus and Coach Repairs, had been purchased from the administrators for an undisclosed sum by The Darwen Group, whose chairman and principal shareholder is Roy Stanley of the AIM-listed Tanfield Group.

Although the Darwen Group is described as a limited company, at the time of going to press there is no record of the Darwen Group on the Companies House website. However, a company incorporated as Minhoco 8 Ltd was established earlier this month with a Mr Roy Stanley as a director. Minhoco 8 was incorporated on 9 August 2007 with a registered address at a firm of solicitors in Jesmond, Newcastle upon Tyne. Roy Stanley joined the board on 14 August at which time its registered address was changed to Lower Philips Road in Blackburn – the premises of East Lancs Coachbuilders Ltd which went into administration on Friday 16 August.

The administrators have yet to quantify the debts of East Lancashire Coachbuilders Ltd at the point when the business failed.

Two of East Lancs’ directors, Mike Kilroy and David Powell, have left the company. Kilroy and Powell, along with sales director John Horn, mounted a buy-out of the business two years ago. Horn remains with the new company. A new managing director, Andrew Brian, has been appointed. Dawson Williams, who had a 50 per cent stake in the business is no longer involved.

Horn attributes the company’s difficulties in part to investment in new models for Euro 4, compounded by slow delivery of new chassis after the changeover to Euro 4 models. "We should have been delivering five or six buses a week, but there were only three chassis coming in a week," he says, but adds: "I’m not blaming our chassis partners."

Last November East Lancs reported that it was making 17 employees redundant as a cost-cutting measure.

Delivery delays have been compounded by certification problems with new Scania double-deckers for London, which failed the tilt test, further holding up their entry to service. The problem was resolved by removing two seats in the upper deck and adding weight around the front axle. East Lancs says that the problem only affected London buses, which have a centre door and centre ramp. Similar single-door buses for Reading Transport and Brighton & Hove were tilted without difficulty.

The company has also had problems with new Esteem-bodied MANs for Stagecoach in Scotland, on which there were reports of windows falling out.

The collapse and sudden rebirth of East Lancs – which now answers phone calls as "The Darwen Group" – will minimise the effect on the company’s customers, many of whom were already complaining about delivery delays, but is going to upset its many suppliers who it will need to fulfil future orders.

Darwen says that it has taken on all 360 employees, and will continue to operate from the modern East Lancs factory in Blackburn.

A spokesman notes: "East Lancashire Coachbuilders is a well respected brand that dates back to 1934 with a highly skilled workforce, proven product and strong market presence. Under our management and guidance, we believe it can exploit some significant opportunities for organic growth and look forward to a prosperous future.

"Darwen has identified a number of key areas of investment including its infrastructure, new processes, new technologies, new products, and its workforce.

"It is business as usual for now – there are a significant number of orders to be fulfilled. Going forward, we have a growth strategy and will begin its execution over the coming months."

Roy Stanley has other transport sector interests. These are in the Tanfield Group, which he formed in 1996, and include Smith Electric Vehicles.



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