Scrap metal merchants Bendalls Limited was forced to go into administration before Christmas, but was sold to an existing business to avoid liquidation.
The firm, which is based in Lydney, Gloucestershire, has been sold to Bendalls Metals Limited. This company is owned by the same director of Bendalls Limited and operates from the same site.
Bendalls Limited was advised by administrators Begbies Traynor in November and December last year and was placed into a pre-packaged administration as it was unable to pay VAT debts owed to HMRC.
Staff have now been transferred to the other company and it continues to operate as a going concern.
Begbies Traynor partner Robert Young said: “We were advising the company in November and December and tried to arrange a deal with HMRC on outstanding VAT payments. However, the director felt that the charges and interest were too high and there was no alternative but to place it into a pre-packaged administration and sold to Bendalls Metals Limited.
“We have written to outstanding creditors to explain the situation. Some of them will receive a creditor’s dividend, while secured creditors will receive the full amount. This is a better situation for them than if the company had been liquidated when they would not have received anything.”