Duff & Phelps appointed as Arlington Automotive administrator

14 May 2020 Consultancy.uk 3 min. read
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Arlington Automotive Group has called on Duff & Phelps to oversee its administration. The firm had reportedly committed to a costly expansion campaign, which put strain on its cash flows as the UK automotive sector faced a number of volatile headwinds.

The restructuring services of Duff & Phelps have been in heavy demand of late, across a multitude of business sectors. The firm’s latest engagement amid the Covid-19 lock-down has seen it appointed for the administration of Arlington Automotive Group.

The UK subsidiary of Arlington International Group – whose wings in France, Germany, Brazil, US, China and joint ventures in India and Turkey are unaffected by the news – Arlington Automotive Group employs circa 600 across sites in Coventry, Newton Aycliffe, Reading, Stourport, Birmingham and Manchester. It is a tier one supplier to the automotive industry, counting JLR, Ford and Nissan amongst its’ customer base.

Duff & Phelps appointed as Arlington Automotive administrator

Arlington’s UK arm consisted of two divisions, manufacturing bespoke thermostats for vehicles and manufacturing and assembling engineered vehicle systems – and had grown rapidly with a number of acquisitions in recent years which included a German business last year. However, the restructuring costs of this expansion placed strain on the UK group’s cash flows, amid a backdrop of wider changes in the automotive sector, including Brexit uncertainty around tariffs, which led to a number of manufacturers announcing the transfer of production away from the UK.

Allan Graham, Jimmy Saunders and Matthew Ingram of Duff & Phelps were appointed joint administrators of the UK trading companies in the Arlington Automotive Group in early May. The group’s Derby site has already commenced closure, and a number of redundancies have been made by the administrators.

Graham said, “The financial issues faced by the group have been compounded by coronavirus. New car registrations have fallen dramatically and the complexity of supply chains in the sector have led to a sudden halt to manufacturing… However, the UK group is underpinned by its strong core operating sites and post coronavirus will with its world-class technology, engineering and manufacturing base be well positioned to take advantage of the evolving car market.”

The heightened business demand for restructuring consulting was recently illustrated by a consortium of investors led by Stone Point Capital and Further Global, who were willing to sink an estimated $4.2 billion into the purchase of Duff & Phelps. The move will allow Duff & Phelps to further expand its offering and expertise – and will no doubt lead to the arrival of a number of talented individuals across the firm’s ranks in coming months.