A HIGH Court judge last week granted an adjournment,
delaying applications to wind up AssetCo, the private company that owns the
fire engines used by the London and
Lincoln fire brigades.
This will give the
company another month to negotiate a deal with its creditors to wipe out debts
of over £100 million
Mr Justice Floyd,
sitting at the Royal Courts of Justice in London,
granted applications to adjourn moves until 28th September to wind up the firm
in favour of allowing the company to open negotiations with its creditors on a
deal that will recover some of their lost investments.
Last May the London
Fire Brigades Union had expressed alarm at a move to bankrupt AssetCo, which
owns London’s fire engines and
50,000 pieces of safety critical equipment.
The union warned that
any such move could see creditors move to sell the company’s assets to recover
their debts.
Northern Bank based
in Belfast, had lodged a creditors’
petition – a move to bankruptcy – over a £1.3 million debt owed by AssetCo.
The company warned
shareholders it could only pay parts of its loans and informed them of the move
by Northern Bank.
The deeply troubled
company is still in the running to secure a contract to train London’s
firefighters. It is playing a key part in the Capital Training Solutions
consortium, one of three preferred bidders to be chosen by the end of the year.
Challenged by the
FBU, the London fire brigade said
its financial experts had examined each member of the consortium, including
AssetCo, and confirmed the bidders were financially “stable”. This was only
days after the company told shareholders it could not pay off all its loans.
Ben Sprung, London
FBU regional organiser said: “The company, which owns and maintains our fire
engines and 50,000 pieces of equipment, is staring bankruptcy in the face. We
could end with all London’s fire
engines and kit being put up for sale to settle the debts.
“Profits have
crashed; the share price has collapsed and top staff, including a new finance
director, have recently left.
“It now can’t keep up
all its loan payments and there is a move towards bankruptcy.
“London
fire service first said it had guarantees this could not happen but could not
produce them. Now it says it has contingency plans if it does happen but they
won’t say what they are.
“There is a serious
crisis looming and the only ones raising public concerns are the capital’s
firefighters. It is a scandal that the ownership and maintenance of critical
equipment is in the hands of a company which has reached this state.
“There are serious
issues of public safety here. The fire authority needs to set out what it has
done and what fallback plans it has. The mayor needs to get a grip on this
before it’s too late.”
Currently the Mayor’s
office, the heads of London Fire Brigade, AssetCo and its creditors are engaged
in emergency negotiations to keep the fire engines on the road.
They will probably
reach a deal but it will probably end up with London
council tax-payers footing the bill.
The creditors named
include state-owned Halifax Bank of Scotland
which is owed £12 million and energy company, EDF, which suggests AssetCo may
not have paid fuel bills for premises they run in London.
Others include FD
Direct, the Inland Revenue. They will still be big losers.
FBU general secretary
Matt Wrack said: “Privatising emergency services is stupid and dangerous. The
long, slow death of AssetCo is a perfect illustration of this.
“We still do not know
what is going to happen to London
and Lincolnshire’s fire
engines. They are, we believe, going to
be the property of AssetCo’s creditors when AssetCo finally goes under. I call on the London Fire Brigade and the
Government to bring the fleet and their maintenance back into public ownership.”