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.”