Redwood/Ascendant closes its doors
The UK company that builds Ascendant vehicle mounted aerial work platform - Redwood Engineering - has been wound up.
The company ran into financial difficulties over an unpaid debt to the UK tax authorities in 2013. At the time it was majority owned by UK rental company Facelift and was placed into administration and restructured. In 2016 founder Steve Dean acquired the business for £1 but took on all of the debts and liabilities,
including a payment plan with the inland revenue service - HMRC.
Since then the company has been paying off all the old debts and rebuilding the business. In 2017 the company appointed Skyking as its sole UK dealer. The company produces a range of standard and custom-built van, truck, tractor and tracked vehicle mounted platforms with working heights of less than 30 metres.
In recent months the company ran into problems again having completed a major deal with a large contractor which withheld payment. This caused an issue with the its repayment to the HMRC, which filed a winding-up order. The company managed to agree an updated repayment plan and the order was withdrawn. However when the company’s bank learnt of the order it withdrew credit and froze the account - the prevented critical payments to the HMRC and insurance company culminating with the winding up order being reactivated last week leaving the business no option but to close its doors.
Dean has another business - Ascendant Access - that has been handling the parts and service business since last year. He told Vertikal.net that his plan now is to work with this business to ensure that the 500 or so Ascendant platforms that have been sold over the past 15 years are supported and maintained.
This is no great surprise. Steve Dean is a first rate engineer and an honourable individual, but he is not the strongest commercially and he has repeatedly struggled from being chronically underfunded. It could be argued that he was naïve to have purchased the Ascendant business as a going concern back in 2016. More ruthless - or perhaps savvy - operators would have acquired the assets only and left the debts in a bankrupt business. We understand however that he felt some personal responsible for the debts the business had with suppliers and was determined to repay them all.
However the repayments kept the business starved of cash, which meant that as soon as one or two buyers began stringing him along with their payments, he was doomed and then his bank dealt the fatal blow.
No matter what the fine details of this case are, the way banks are able to use their privileged position to seize a customer’s funds (most small UK companies use an overdraft to provide day to day funding which a bank can withdraw without notice and will usually do so just after a large payment comes in) is an outright scandal. Larger businesses with more ‘street smarts’ know this and structure their debts to ensure that the banks are more locked in and will share a good deal of the pain if they take such action.
The Ascendant parts, service and repair operation should at least provide a base from which Dean might recover something from the ashes? Although he would benefit from a commercially savvy partner. Could it be third time lucky?