Business

Pakfin Logistics, the contract packaging and finishing company, has agreed to purchase the business, plant and machinery of Pakfin Limited from the administrator, saving 60 jobs.

Both companies share common directors Frank Owen, Mike Burch, Trevor Shepherd, Tim Holloway and Burch's son, Michael.

Frank Owen told Packaging News that the two firms are part of the Pakfin Group, founded in Colchester in 1987, which operated from five sites.

Pakfin Limited handled magazine inserts and contract packing, while Pakfin Logistics handled the reworking, storage and distribution.

The group consolidated at premises in Clacton-on-Sea in February 2008.

Owen said: "We found the new premises, which fitted the bill splendidly in terms of size, layout and facilities, in April 2007, but the move was dependent on an EDA grant, which was finally approved in October."

However, the autumn months are Pakfin Limited's busiest time and it struggled through the Christmas period, losing money, but the directors decided to go ahead with the move.

"We had agreed a loan to make the move happen, but because of the credit crunch it was withdrawn. We then saw a sharp downturn in sales during April, May and June, but arranged additional finance that was not forthcoming until this month," said Owen.

The creditors were unwilling to wait until the money was in place and the directors tried to find a solution, in the end seeking professional advice.

Pakfin Limited was placed in administration on 22 July.

The company's directors and administrators Mark Getliffe and Diane Hill of CLB Coopers Chartered Accountants in Manchester have now agreed a way forward.

"Pakfin Logistics takes over the plant, equipment and goodwill of Pafkin Limited and a percentage of the profit will go to the administrators over a three-year period and then to the creditors," said Owen.

Hill said a creditors' meeting will take place in the next few weeks where full details of the administrators' proposals will be revealed.