Unimetals appears headed for liquidation

Metals recycling company Unimetals Ltd., whose assets consist largely of the former Sims Metal United Kingdom operations, has filed for liquidation, according to reports in the U.K.

The company made a preliminary court filing signaling financial distress last month. At that time, reports indicated the partners who purchased the Sims Metals UK assets to create Unimetals had anticipated an additional investor coming on board, but that investor later declined to be involved, harming the company’s cash position.

At that same time, Australia-based Sims Ltd. released a statement saying Unimetals owed it a final payment of about $46 million, noting the money owed partially was secured by its debenture security.

“We have worked tirelessly to explore every possible option to secure new financing for Unimetals Recycling (UK) Ltd., with the aim of meeting our financial obligations and safeguarding the future of the business," a Unimetals spokesperson tells the BBC in a report.

That statement says Unimetals attempted an accelerated mergers and acquisitions process to identify potential buyers or investors that has not yet met with success.

“Regretfully, despite substantial interest and attempts at completing a deal, no transaction was concluded,” the spokesperson tells the BBC.

Other reports also indicate the New York-based consulting firm Alvarez & Marsal Holdings LLC, which has a London office, has been recruited by Unimetals to assist with the next steps to be taken.

Guidance offered on the Gov.UK website indicates there are three types of company liquidation in England, where Unimetals is chartered.

A voluntary liquidation is carried out by a company that can pay its debts but its owners wish to close it. In a creditors’ voluntary liquidation, when a company cannot pay its debts, creditors become involved in liquidating it. And finally, a compulsory liquidation occurs when a company cannot pay its debts and an application is made with the court system to liquidate it.

During the liquidation process, the company will stop doing business and employing people. When you liquidate a company, its assets are used to pay off its debts. Any money left goes to shareholders.

“Our priority now is to work closely with all stakeholders including employees, suppliers, customers, creditors and our regulators to ensure that the liquidation process is managed safely, responsibly and transparently," the Unimetals spokesperson tells the BBC. "We are working urgently to agree on a clear plan and timeline for what happens next.”