Tag Archives: london fire brigade

Exclusive:London’s fire brigade owners to go bust owing £140m on Monday unless a take over succeeds

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AssetCo: In a even deeper hole Pic courtesy TheScottishSun

AssetCo, the owners of London and Lincolnshire’s fire engines will go under on Monday, owing a staggering £140m to creditors unless a take over deal is agreed in the next 48 hours, a registrar’s hearing was told on Thursday evening.

In an extraordinary move in advance of Monday’s Companies Court hearing to examine thecompany being liquidated or going into administration, directors of AssetCo , lawyers, and  investment bankers sought to grab £86,000 in fees before the company went bust.

 Matthew Parfitt, lawyer acting for AssetCo, revealed that lawyers and investment bankers working on potential take over bid said they would ” down tools” or ” down pens” on saving the company unless the Registrar, Mr Briggs, validated fee payments immediately.

He  said  two directors, Tudor Davies and Tim Barrett, threatened to quit the company today (Fri) unless the court authorised payments of £25,000 for a week’s work and up to £1000 for expenses for hotel bills and meals. It was revealed Mr Davies is charging AssetCo £3000 a day for his work and Mr Barrett £2000 a day.

Mr Adam Goodison, acting for creditors Northern Bank, owed over £1.3m, revealed the figures, when he opposed any move to pay out the cash. He speculated whether there was ” panic among the professionals working for the company ” that had made them seek this order. Other creditors were sitting in the Room 412 at the High Court to observe what was happening to their money.

Mr Briggs described Assetco’s submission as ” extremely unattractive” and agreed with Mr Goodison that the company was putting ” a gun to the head of the court” by threatening to ” down tools”unless they received ” a substantial amount of cash.”

He refused to authorise the payments saying ” he hoped the gun will now not go off.” Instead he adjourned any decision to Monday’s hearing which stopped directors getting preferential treatment.

The scale of AssetCo’s woes were revealed in a submission from Mr Parfitt. They show that on Monday it could  go down owing between £117m and £140m and that money was disappearing on a daily basis.

Among the  major new creditors are state owned Halifax Bank of Scotland which is owed £12m 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.

 He tried to talk up the one unnamed bidder still  said to be  in advanced talks saying the deal would mean all creditors would be paid in full ,all bank loans restructured and the company recapitalised. But his statement to the court means that four out of five potential bidders have now walked out.

Mr Briggs queried why in these circumstances the company had not give in confidence details of the bid to the court – which happens in similar cases- so the court could decide itself.

 Mr Goodison went further: ” If this deal is so wonderful why is there any need for this order and it would be unnecessary if it goes ahead.”

Then he detailed the demands for payment. They included a £25,000 flat weekly fee from a foreign investment bank which will get hundreds of thousands of pounds from a success fee if  it goes ahead and £36,000 to a firm of solicitors that has drawn up  the plan for administration.

The only people who came out well were Mr Parfitt and Mr Goodison who declined to take costs for the 90 minute hearing.

Matt Wrack, FBU General secretary said: “The demands the directors and advisors made to the court beggar belief.
“The London and Lincolnshire fire brigades do not own their fire engines and kit and are in crisis because they privatized all of their operational assets. Both brigades, the Mayor of London and Government have shown extraordinary complacency.
“The entire operational assets of both brigades could be seized by creditors and sold off in full or in part. Neither brigade appears to have any fallback plan of any credibility.
“The foolish decision to privatize all fire engines and kit leaves them sitting on the sidelines with no power over what happens to their critical operational assets.
“What was put before the court is a public scandal and makes clear in whose interest private companies work. Yet the only people making an issue out of it are the firefighters on the ground who do care about what happens and the impact it could have on public safety.
“There must be an end to privatization in any critical emergency service.”

 My comment on this is simple. Apart from this being another example of City directors blatantly trying to fill up their boots with oodles of cash at the expense of other people , questions must be asked about all the people who agreed that this company should be given multi million pound contracts. In London I am afraid this includes Labour mayoral candidate Ken Livingstone and Val Shawcross ( he declined to give a quote to me for a Tribune article this week), Boris Johnson  and Brian Coleman, chair of the fire authority, who extended AssetCo’s role. In Lincolnshire I am told senior officials were involved with the firm and then there are all the former fire chiefs who taken jobs with them.

AssetCo shares dropped nearly 13 per cent today to an all time low of 2.22p making it  worth just £5.77m. If  on Monday AssetCo goes down, there must be  an official inquiry.

Predators stalk the corpse of London’s failing private fire firm

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Not their vehicle but the symbolic state of AssetCo. Pic courtesy: TheScottishSun

Like encircling vultures, bidders across the globe are now looking  at the dying corpse of AssetCo, the floundering private fire company, for a cheap buy  as it shares hover around-3-5p mark.

Virtually all the bidders are potential asset strippers looking to buy cheap and then re-sell the company for a potential fast buck. Here is the full list, as far as I can glean. They have some interesting baggage as well.

Still with a bid on the table – but nowhere near the earlier offer of 14-21p a share- is Arcapita Bank  a Bahrain based company run by a wealthy Saudi.

The bank has run up big losses because of the credit crisis and lack of easy credit from financial institutions for private equity speculations. Its latest accounts (2010) post losses of $559 million. It is currently refinancing a $ 1.1 loan by raising cash from shareholders.

It makes its money in US, UK, Singapore and Far East and the Gulf by investing in firms for about seven yrs, restructuring them, and reselling them at a profit. (can be anything from clothing, aircraft manufacturers, retirement homes, dentistry and electricity).

Its most controversial investment is in Cypress Communications, a US high tech company, providing firewalls for US companies. Its bid became embroiled in a row when Arcapita’s chairman, Mohammed Abdukaziz Al Jomaih (27th wealthiest  person in Arab rich list) was accused of secretly financing Osama Bin Laden. His name is on seized list obtained in an anti-terror raid in Bosnia. He claims that he is not the person on the named list but that it is someone with the same name who is conveniently now dead.

Despite this Arcapita found itself forced to sign a National Security Agreement banning all but US nationals holding top posts in its acquired company and only US citizens able to handle sensitive network and security info. Don’t believe me. Read it at  http://bit.ly/j0z0gO .

Abdulaziz Hamad Al Joiah is vice chairman. Another Saudi Arabian. MD of Aljomaih Holding Co and director of Bank Al Bilad, Riyadh. He is chairman of Principle Insurance Holding – a Muslim car insurance company targeting 2 million Muslim drivers in UK –run on Takaful principles – a sort of Muslim mutual co-operative.

Another bidder tipped by Bloomberg is Florida based Seacor Holdings. The Fort Lauderdale company with international interests in supplying  the offshore oil industry  suffered a bad knock  in the wake of Obama’s ban on drilling in the Gulf of Mexico after the BP oil disaster. It is trading at a loss and has had to warn shareholders of potential future losses. Not a good bet.

According to City AM there are two other interested parties. Investindustrial, an Italian based company, that invests in a wide range of companies ( from chemical companies to Ducati motor bikes) from Italy, China, Thailand and USA  and again is interested in making short-term gains.

The only British firm is Consilia Partners from  Manchester. It describes itself as a turn around company  and AssetCo would join an Ipswich catering equipment distributor and an Egyptian marble company in Cairo as its other investments, according to the Manchester Evening News.

 None of this seems to me to bode well- particularly as AssetCo is facing a new creditor, the Northern Bank, with a demand for £1.3m. What seems more likely is  a serious tip-off from City Hall – that the London Fire authority may prefer AssetCo to go bust, go into the hands of an administrator, and be picked up by Capita or Serco , both mega British companies that target public services ripe for privatisation.

Otherwise the idea that the London fire brigade’s extensive fleet of engines will fall into the hands of an Arab company whose boss was once suspected of funding al-Qaeda; an US company in trouble over the Gulf of Mexico oil spill; an Italian firm with a reputation for quick fix investments or a Manchester ” turn around” firm is hardly the best news for Londoners.

Readers top 3,400 for AssetCo, MetPro and green dirty tricks

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Last week visits to the site topped 3459 with massive interest in the fate of AssetCo, the collapsing private fire company which owns London’s and Lincolnshire’s fire engines. Two blogs attracted  over 2500  hits. A big number came from the Fire Brigades union (many thanks), but a significant minority are people picking up  the blog from three small investor sites – as speculators wonder whether to dump their shares or throw more money at it. With shares at just 3.50p at the moment the company is little more than junk stock.

A sudden rush on an older blog exposing how the environment ministry has biased its ” red tape” review of green laws and regulations to favour burdens on business at the expense of the benefits of the  law, has attracted over 940 hits. Thanks to environment campaigner, George Monbiot, for retweeting it and attracting extra trade and a  few subscriptions.

Expect now a pause in blogging as I am off  to the tranquil and peaceful delights of the Isles of Scilly for hopefully an accident free holiday ( after my fall there last time!).

Update: Now AssetCo’s financial saviour quits

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AssetCo's state of finances: Pic Courtesy:www.onenewspage.co.uk

 Scott Brown, the Australian financial whizz kid brought in to shake up the collapsing private fire company, quit AssetCo yesterday, it has just been announced.

His departure is the latest blow to the firm which owns and services London and Lincolnshire’s fire engines and provided a strike breaking auxiliary workforce in the dispute with the London Fire Brigade over shift patterns last year.

It came as shares fell to just 3.93p – a new low – which must mean the company is not long for this world.

Appointed only last October the 43-year-old was meant to help turn the company round and plan an expansion of its activities.

The official statement from AssetCo described his departure as part of ” the orderly transition in its finance area  ”  claiming “Mr Brown’s immediate duties and the finance structure is being managed day-to-day by a senior interim manager, who is reporting directly to Interim Chairman, Tudor Davies. ”

 Frankly this is balls. An orderly transition would mean that the company would already have someone  appointed in  his place – not some interim manager who probably has been appointed at the last moment.

 I talked to him  briefly on his mobile when the company was having to raise extra finance – and it was quite clear from the conversation that he saw the company having a big future – once it had got rid of hotchpotch of manufacturing firms  it acquired in the 1980s and could expand by offering its services to other fire authorities and abroad.

More to the point he is  shrewd enough to quit before it goes bust. A check on the land register shows he has a large house in Barnes, south London which he and his partner Elizabeth Hackett-Brown bought for £1.425m in 2009 with a mortgage from HSBC. He won’t want as a director  to  put that at risk if the company goes bust.

 He also is the key man negotiating with the banks – so I just wonder how well the negotiations for extra cash are going.

I have a feeling that it won’t be long before  London Fire Brigade’s shiny engines will be in the hands of the administrators.

Assetco and MetPro: Stains on London’s political masters

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Coleman and Assetco: stain on London fire Brigade

Metpro-stain on Barnet Council

Politicians at the London Fire Brigade and Barnet Council should be hanging their heads in shame for awarding multi-million pound contracts to two private contractors, MetPro and Assetco – one of which is now bankrupt and the other only valued as junk  stock .

Both scandals have featured on this site before but the situation is going from bad to worse.

An extraordinary statement from Assetco -owner of London and Lincolnshire’s fire engines and a strike breaking auxiliary force for London’s firefighters – basically admits that it does not have the cash any more to meet capital repayments needed to run its contracts with London, Lincolnshire and the Middle East.See http://bit.ly/mP5WFa .

The key paragraph reads:  “The main issue that the business is facing is the capital repayment profile not matching the long-term nature of the Company’s contracts. Whilst the Company is cash generative and can meet its interest costs, it does not generate sufficient funds to meet all the repayment of capital as currently scheduled. The banks are supportive regarding the short-term financing situation and are awaiting our proposals on a financial restructuring but in the meantime we are in breach of our banking arrangements.”

This sorry state has been brought about by its former founder John Shannon who last month was summarily dismissed by the company.

Shannon had landed the company in court facing a winding up order for millions of pounds of unpaid taxes from Revenue and Customs-something they don’t do lightly- and a huge £1m unpaid legal bill from Nabarro’s.

No sooner had these been settled by diluting the share price in a £16m offer to new investors then more grief was to follow. The share price  is now down to a junk figure of 4.65p a share –  when it once sold at 66p. Market capitalisation at £11m is now less than the value of its PFI contracts in London and the Middle East.

Yet Shannon and his former co-founder are trying to recover £1.1m from the collapsing firm while facing a counter-claim from Assetco for £8m for ” breaches of fiduciary duties”. A bloody legal battle  is on the way distracting it from its business.

 All this might not matter if they did not own all the fire engines  in the capital and Lincolnshire. But the London Fire Brigade has reacted to the crisis with breath-taking complacency. Gareth Bacon, performance management chair, believes there is no serious problem.

 Brian Coleman, who was wined and dined by Shannon as well as receiving a gift of a £350 Harvey Nicks Christmas hamper, is silent about the fate of his dining companion.

Yet consider this.Would it be appropriate for a public body to avoid paying taxes and be so reckless with its finances so it can’t repay its capital loans to banks? And for the authority to be in a such a bad way that it has had to hire financial staff to sort out the mess. Heads would roll.

Barnet Council is in a similar mess over the bust private security firm MetPro who owed £250,000 to Revenue and Customs for unpaid tax, VAT and even pay roll tax deducted from its employees.

 The fate of this company would not have come to light if it had not been so reckless by filming bloggers and members of the public without their knowledge or permission as they came to watch the council implement cuts.

But now Barnet have admitted they were UNAWARE of the financial plight of the company which got £1m of business and glowing references from them on its website  (now finally removed) and appears to have avoided any public tendering process to get the business.

There is a link to both these scandals and he is called Brian Coleman. He has been the key advocate of the government’s privatisation agenda and cheerleader for the company -particularly the disgraced John Shannon. He is also the big wheel on Barnet Council- Cabinet post for the environment- and must have had some knowledge of the bankrupt MetPro. And there is even a bit part for the complacent Gareth Bacon in all this – his division at  Dutch consultants MartinWardAnderson has made £75,000  (£12,600 a month) over just a six month period in 2010 – providing temporary finance staff for Barnet.

Can anyone do anything about this? Yes- firefighters employed by the London Fire Brigade could ask for a due diligence investigation by the district auditor Michael Howarth-Maden over the handling of the PFI contract, alleging the authority had employed a company involved in proven tax avoidance

 Similarly residents of Barnet could demand an investigation by its external auditors,Grant Thornton into the hiring of MetPro. Here the crucial question should be -how they got the contract in the first place.

It is really time action was taken – the scandalous behaviour of both firms is a stain on London’s politicians.

Record Interest in blog banning Barnet and AssetCo’s fire sale

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Last week’s blogs on Tory controlled Barnet’s defiance of Eric Pickles on banning bloggers and the woes facing Assetco, the London strike breaking private fire company, produced record hits for my modest site.

Altogether there were 3293 hits in seven days – with two record hit days of 1,375 and 1021. There were 1324 hits on the Barnet story and 1128 on  the revelation that AssetCo were facing a winding up petition from Revenue and Customs.

Barnet’s refusal to allow bloggers or filmmakers to record their big cuts package was much boosted by decisions by Guido Fawkes and Conservative Home to mention it on their websites. Guido Fawkes led to 1001 visits while Conservative Home attracted 55 visitors.

 The AssetCo story was boosted by being mentioned by the FBU – some 100 referrers – but a lot of the interest appeared to come directly. Mentions by the London Evening Standard and The Mirror produced  20 and 6 hits respectively, suggesting that the traditional media is losing ground to blogosphere sites. They were nearly equalled by hits from Liberal Conspiracy, Broken Barnet,VicKim57 and Left Foot Forward.

Interest in both stories revived hits on an older but updated blog on Brian Coleman, who features in both Barnet and the London Fire Authority. Hits have now reached 2285, with  massive interest in his council allowances,free gifts and expense claims.

So thank you. This week there will be new revelations about Barnet and the plight of AssetCo. So keep watching.

Do Londoners want firefighting on the whim of bankers and hampers from Harvey Nicks?

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a london PFI fire engine equipped with tax debt pic courtesy http://www.freefoto.com

April 20 will be a day of reckoning for AssetCo, the company that owns London’s and Lincolnshire’s  fire engines  and was used by the London Fire Brigade to try to break striking firefighters. It has until April 20 to answer in the Companies Court following  a winding up petition from Revenue and Customs  which could lead to the company and its subsidiaries being put into administration.

On that day it will have to answer  a petition from Revenue and Customs to repay anything between £5m and £8m ( we don’t know exact sum – winding up petitions are secret documents) in overdue tax or go into administration. And a banker will move in to own London’s  fire engines.

This scandal would have never seen the light of day if the directors of AssetCo, led by chief executiveJohn Shannon, had not been hoping to pull off a big coup and make a small fortune by allowing their company to be taken over in the wake of the publicity over the London fire dispute.

Whatever company examined their books – we don’t know the name – obviously did not like what it saw  and suddenly talks were over and shares plummeted. They have not recovered and were trading at 17.5 p yesterday rather than 70p at their height. Within days the company admitted it had to repay some £50.6m of debt and find £8.5m working capital including plus a £3.5m urgent overdraft from the bank. Seven days later it announced that it wanted the same shareholders who had seen their investment plummet to give them another £8m.

It stated: “The Directors believe that with the cooperation of the Company’s creditors and banks, the current financial strain on the Company will be temporary, and the additional funding resources referred to above will ensure that a more appropriate capital structure will be in place to support the future growth of the business. ”

What it did not tell anybody was that two days after the announcement it was in front of the Companies Court in The Strand in London pleading for a delay against a petition  from Revenue and Customs to wind up some nine of its companies because of long overdue tax.

I am told that  Revenue and Customs never issue winding up petitions unless a lot of money is owed and there has been a prolonged period when tax due was never paid.

The company now says it has a £120m new contract from the United Arab Emirates and it has hived off London from the any forced administration so no-one should worry.The London Fire Brigade officially appear unflustered. A spokesman  said: “We plan for all events that could affect the fire and rescue service we provide and do not anticipate an impact on London’s fire engines.”

I understand London Fire Brigade are expecting if AssetCo goes belly up that a bank will take over ownership of London’s fire engines. Then either negotiations will start about the brigade taking back ownership of the engines or another bidder – and the rumour is it might be Babcock who already have  firefighter training centres and run Firebuy’s emergency vehicles – could take over.

No wonder Matt Wrack, general secretary of the FBU, is demanding assurances from Bob Neill, the fire minister.

As he put it: “The safety of Londoners, and of London’s firefighters, is in the hands of a company which could be wound up in six weeks time because of tax debts.  At the least, this will mean that there is no one to maintain London’s fire engines.  At the worst, it could mean that London forfeits its fire engines to pay AssetCo’s debts.
We have all known for some time that AssetCo was suffering from financial problems, though it is only now that I have discovered they are so serious as to put its future in doubt.  I do not know how long Councillor Brian Coleman, chair of the London Fire and Emergency Planning Authority, who is close to AssetCo’s senior management, has known the situation. ”

To me it is very simple. If this was publicly owned none of this would have happened. And what happens with AssetCo now could be harbinger of what is going to happen on a massive scale when everything else is sold off across the country.

Do we really want something as precious as saving lives dependent on whims of bankers and companies? The owners appear to have built up tax debts while their directors pay themselves huge salaries and get huge sums in dividends?

Londoner’s lives are more important than receiving a £350 Christmas hamper from Harvey Nicks  (as Brian Coleman has) from grateful businessmen busy making profits out of public services.

Update March 3: AssetCo is seeking to place £16m of shares at a knock down price of 10p a share – nearly a 30 per cent discount – onits closing price of 13.8 p a share last night – to urgently raise funds to payu debts ands tax bills. The offer is being underwitten by its own brokers and adviser, Arden Partners, with a promise from chief executive,John Shannon, to guarantee its overdraft. Other directors are subscribing for £116,000 worth pof the £16m shares.

The statement warns: “If the Placing does not proceed, the Directors believe that the Company will not be able to continue in its cutrrent form”.A spokesman for the company yesterday claimed it was already oversubscribed. Meanwhile the shares had fallen a further 1.5p to 12.50p

 

Armchair Audit: David Cartwright Boris’s bon viveur fireman

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Bon Viveur Tory: From CND to East India Club Pic- courtesy London Fire Brigade

Boris Johnson’s reform of the London Fire Brigade is going to rely heavily on the views of David Cartwright, one of the least known of the Mayoral appointees. This looks into his background.

David,61, is a former assistant commissioner of the London Fire Brigade , a fire consultant, vintner and chairman of  the East India Club, a gentlemen only club dating from Britain’s colonial past and a favourite watering hole for well-connected public schoolboys. He once wore a CND badge: he is now a card-carrying Conservative.

HIS INCOME

From the taxpayer

Mayoral appointee allowance as member of London Fire Brigade                                                                                                                                                       £7750

Firefighters pension ( paid since 1999 retirement at the age of 50,  indexlinked from 2004 )                                                                                                                                                       £37,500 +

Total:                                                                                                                                                      £45,250 +

Private Income:

Consultant to Eurocopter, subsidiary of Dutch defence contractor, Eads

Co-owner of Cartwright Brothers Vintners Ltd

Director, Viaduct Enterprises Ltd who partly own Bedales deli and wine bar in Borough market

Chairman, East India Club (unpaid)

EXPENSES

Commendably Nil.

HOME

Joint owner with wife, Kathyrn of detached home in Mottingham, London SE9 with outstanding mortgage from Bank of Scotland.

LIFE

Son of pacifist Anglican priest,supporter of CND and educated  at Colfes Grammar School 1961-67,. then voluntary aided boys school now public school. Became a fireman rising through ranks to assistant commissioner.Under Ken Livingstone,progressively followed policy of recruiting black and (after qualms) women firefighters. Full interview given to Modern Communications at http://bit.ly/gZoIv2 .

He has growing outside interests. He is consultant to Eurocopter, who are based at Oxford airport in Kidlington and are engaged in leasing helicopters to police forces and ambulance services. His connection with them arose when the London Fire Brigade considered using helicopters in the 199os. See article in Flight International,http://bit.ly/f9ZEng.

On this he says: “The London Fire Brigade have no helicopters and I have not tried to sell helicopters to the London Fire Brigade. ..I have acted properly in this matter and took formal advice from the Clerk to the Authority before I took up the post of Mayoral Appointee.”

His more jolly appointments include his directorship with his brother,David and nephew,Richard, of  the City based vintner Cartwright Brothers. Unfortunately for him the business is more in the red than laying down more red. Its last accounts show losses of nearly £200,000 despite raising £100,000 share capital. Its directors have borrowed over £100,000 from the business between them. He says:”It has not been easy and I sincerely hope it is now turning around, but the recession has not helped. I am optimistic! ”

He has an interest but no management responsibilities for a popular wine bar and deli in Borough Market called Bedales – set up by market traders. But sadly that will eventually be bulldozed to expand Thameslink rail commuter services.

He is chairman of the  male only East India,Devonshire and Public Schools Club, whose  5255 membership dates back to Prince Albert and the colonial East India Company and is based at St James Square,London. Membership depends like the unreformed House of Lords  on the male hereditary principle (father can propose son) or on recommendation from public school heads. Women can come in as guests and David Cartwright has managed to improve the dress code so they can wear smart trousers and are no longer forced to dine on Brown Windsor soup and indifferent meat. You can get a flavour of the club on its website http://www.eastindiaclub.com/ . Past members include Denis Thatcher ( Maggie could only enter as a guest), Randolph Churchill, and Austen Chamberlain. Current members include Lord (Sebastian) Coe, UKIP leader Nigel Farage, Robert Halfon, Tory MP for Harlow, ex West Midlands police chief, Lord ( Geoffrey) Dear and industrialist Professor Colin Seabrook.

Cartwright defends the male only status quo: ” This is entirely within the letter and the spirit of the law. The members can vote to alter this at any time, should there be a sufficient number wishing to do so. Currently there appears to be no desire to do so”

According to the  latest report members consumed £1.2m of food and drank and smoked their way through £661,000 of  alcohol and tobacco. The club has laid down port worth nearly £400,000 and vintage wine worth £335,000.

No wonder one of the guests entertained there twice by David Cartwright was London fire brigade chairman Brian Coleman, never knowingly undernourished at other people’s expense.

VIEWS ON FIREFIGHTERS

Has distanced himself from Brian Coleman’s view about firefighters being ” thick and thugs”.

” I am fiercely proud of the London Fire Brigade, with two serving sons on the uniformed side. I am also proud of my service to London in this regard. 99% of firefighters are honest, decent loyal and committed individuals who provide a unique service to London, often in the face of personal danger. I hold them in the highest regard. I believe the Chairman, Brian Coleman was referring to some of the hotheads on the picket line – some of whom I understand were not actual firefighters.”