Better Capital 'regrets' City Link administration news on Christmas Day

29th Dec 2014 07:18

The owners of collapsed parcel courier City Link have said they "very much regret" that staff were told of the company's entry into administration on Christmas Day, putting more than 2,700 jobs at risk.Better Capital, run by Jon Moulton - who attempted to rescue car maker MG Rover in 2000 - said in a statement to the London Stock Exchange that the appointment of administrator Ernst & Young was leaked ahead of the planned announcement."The directors very much regret the impact on the employees of City Link receiving such bad news on Christmas Day," Better Capital said.City Link said in September that it was facing a lack of profitability and that various options to maximise the value of the investment were being considered. At that time, the investment was written down by half from £40m to £20m.Following a detailed review of City Link's strategy and prospects, including unsuccessful discussions with a number of counter-parties about a sale on a going concern basis, Better Capital decided it was inappropriate to commit further capital from its 2012 fund."Accordingly, in light of continued substantial losses, City Link could not continue as a going concern," it said. Ernst & Young were appointed on Christmas Eve.The administrators will begin the process of realising City Link's assets. It said the valuation of the assets was subject to "modest uncertainty and the effects of intervening trading" but the final valuation was likely to be close to the valuation in September.