Published: 26th August 2015
A Welsh maker of road signs has entered its business into liquidation with 38 staff members being laid off as a result.
Based in Ebbw Vale in South Wales, Monwel has been operating as a social enterprise but succumbed to financial pressures and ceased trading at the end of July.
It is understood that the business had a deficit of some £400,000 and no prospect of recovering to a sustainable financial position.
With a trading history stretching back almost 50 years, Monwel became a social enterprise in 2013 but has found itself unable to pay back debts to a variety of creditors, including HM Revenue & Customs, its local council body and its own employees.
Business recovery specialists Begbies Traynor have been appointed to manage the process of liquidating any assets of value owned by the business with a view to maximising repayments to creditors.
High employment costs, reduced sales levels and a high deficit were all factors contributing to the need for Monwel to be liquidated, a spokesperson for Begbies Traynor explained.
Earlier this year, the sign making business was commended by the Welsh Government as being a good example of a social enterprise providing valuable employment and services within a particular community.
Statements on the firm's website explained: “The company has recently undergone a period of transition from ownership by the local authority to an independent social firm/enterprise.
“As a not-for-profit social enterprise, Monwel will ensure the delivery of its social objectives that ultimately fulfil a high profile social agenda and strive to operate commercially and profitably in a competitive marketplace.”
The process of transitioning the council-run sign-making operation into a social enterprise company was widely seen as having been a success and a notable benefit to the local community in Ebbw Vale.
However, financial pressures in recent months meant that the company's 38 members of staff lost their jobs last month and the business was officially entered into liquidation on August 20th.
Blaenau Gwent County Council was cited among the list of creditors owned money by the company as it was entered into liquidation in the past few days. Our extensive office network comprises 78 offices across the UK with a partner-led service offering immediate director advice and support.