Fire Brigades Union

Fire Brigades Union

May 19, 2011 05:00 ET

Fire Brigade Union Attacks Move to Involve AssetCo in Providing Fire Service Training in London

LONDON, UNITED KINGDOM--(Marketwire - May 19, 2011) - The Fire Brigades Union has attacked moves which could see AssetCo provide a key role in providing training for London's fire service. The company is central to a consortium bidding for a contract that would outsource the training of London's fire crews.

AssetCo currently holds the contract to own and maintain all London's fire appliances but has hit serious financial problems and faced a winding up order in March because of unpaid taxes and legal bills. The company's share price, profits and market value have plunged in the last 12 months.

In the latest twist to the company's woes, the company reported to the Stock Market that its Finance Director resigned on 17 May.

FBU General secretary Matt Wrack said: "AssetCo's share price has collapsed, its profits have plunged and it is in turmoil. It beggar's belief that the London fire service is content to give this company a central role in training London's firefighters."

The deeply troubled company is bidding for the training contract as part of Capital Training Solutions consortium, one of three preferred bidders for the training contract to be awarded by the end of the year. In an email sent on 16 May in response to union concerns, the fire service stated: "All members of the consortium have been subject to a thorough independent check undertaken by our financial advisors…. as part of due diligence all bidders were instructed to submit additional information to determine whether there had been any changes which might affect their legal/regulatory standing, economic and financial standing and/or their technical ability and experience. After having assessed all the available information, our advisors have confirmed that all three bidders' financial standings are considered stable."

However, a Shareholder note issued on 12 May, only days before, AssetCo confirmed it is struggling to pay off bank loans and is in breach of its banking arrangements. While they can pay interest on the loans, they cannot repay the capital.

Any further fundraising from 'investors', the note stated, is dependent upon agreeing a sustainable and appropriate financing structure with its bankers. It is currently embroiled in legal action with claim and counter claim regarding the departure of its co-founders in late March.

HM Revenue and Customs took the company to court threatening to wind it up because of unpaid taxes. The company share price has dropped sharply and is currently trading at around 5p, well off its 12-month high of 66p – a 90% drop in price – and well off its 5-year share high of £2.31 hit in August 2007.

Matt Wrack, FBU General secretary said: "It's astonishing that this deeply troubled company is being considered for a central role in the training of London firefighters. AssetCo is embroiled in legal action around previous financial statements and is in breach of its banking arrangements.

"The taxman had to take the company to court threatening to wind the company up because of unpaid taxes. The company itself clearly has major concerns it has reported to shareholders.

"It is currently investigating and assessing its own finances because of concern about previous financial statements. It accepts this investigation is 'hampered' by the sacking or departure of its co-founders.

"On Thursday 12 May the company told its shareholders the very grim situation it was in, much of it public knowledge. On the 16 May the London fire service told the union the company was in a position to play a key role in running fire service training in the capital."

Shareholder Note 12 May

FINANCING/DEBT SERVICING

The Board's investigation into the finances of the Company have been hampered by the absence of those involved in the past financial statements, and interim accounting staff have been brought in to assist in assessing the situation.

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.

FUNDRAISING

The Company is also in discussions with the "Investors" with regard to the £10 million of financial support as announced on 21 March 2011. However, any proposal for a further fundraising will be dependent upon the Company agreeing a sustainable and appropriate financing structure with its bankers.

16 May, response to email from London FBU Executive Council member Ian Leahair:

Asset Co is not a bidder in its own right it is part of a consortium collectively known as Capital Training Solutions. All members of the consortium have been subject to a thorough independent check undertaken by our financial advisors. In view of recent press releases, in addition to the pre-determined outline solution evaluation criteria and as part of due diligence all bidders were instructed to submit additional information to determine whether there had been any changes which might affect their legal/regulatory standing, economic and financial standing and/or their technical ability and experience.

After having assessed all the available information, our advisors have confirmed that all three bidders' financial standings are considered stable. Consequently, it has been decided to take all three bidders forward to the detailed dialogue stage.

Peter Groves, Project Manager - Future Options for Training

Contact Information

  • Media contact
    Francis Beckett
    07813 001372