PricewaterhouseCoopers was called in by bankers for the comp-any – which last year posted a £60m turnover – after it exceeded its agreed overdraft facility. The company believes it could have survived if the overdraft had been extended.
“We’ve had 15 successful years of trading and three disappointing ones, and it is so sad to see it all end this way,” says managing director Bill Robson. “With cooperation from our lenders I’m sure this could have been avoided. I’m astounded that they should take such action.”
South Cleveland Garages operates Citroen, Suzuki, MG Rover, Hyundai and Peugeot dealerships in Middlesbrough, Citroen and Peugeot sites in Hartlepool and a Mitsubishi dealership in Darlington.
The group also owns a fast-fit garage in Hartlepool, an express factors business with 12 delivery vans and a bodyshop in Middlesbrough.
Around 300 people make up its workforce. PricewaterhouseCoopers says a core staff of 35 employees has been kept in this week – the rest were sent home without pay and are due to meet today (Friday) with the administrators to discover if they are redundant.
All sales and servicing operations have been frozen.
Ian Green, a joint administrative receiver at PricewaterhouseCoopers, says: “The company has been experiencing financial difficulties, in particular with issues relating to working capital. While we evaluate the options we have retained a core workforce and are attempting to raise additional finance to enable the business to continue to trade.”
When it gained its Suzuki franchise in 1997, South Cleveland Garages became the third most successful dealership for that brand in the year. It has held the Citroen franchise in Middlesbrough since 1992, although its Hartlepool Citroen dealership has only been operating since August 2003.