Engineering firm planning sell-offs to keep business afloat

DEBT-LADEN Doncasters is close to agreeing a wave of fresh sell-offs to appease lenders, slash its debt and stay afloat – saving thousands of jobs.

The Staffordshire-based business – one of Britain’s oldest manufacturers with a history stretching back to 1778 – is seeking to sell two Uk-based operations and evaluating the future of two others in Germany and the US.

Doncasters is burdened with a £1.1bn debt pile that requires huge interest payments and has already been cutting back. It raised almost £140m after the sale of a precision forging arm last month and the disposal of its Belgiumbased Settas unit in September.

The firm, whose products include parts for jet engines made by Rollsroyce and General Electric, is seeking to push through more sales and restructurings within two months.

That will leave a core business with about 2,400 staff, almost half of them in the UK. Doncasters was bought by sovereign wealth fund Dubai International Capital for £700m in 2006 as part of a debt-fuelled spending spree.

But the company has since been forced to sell off divisions piecemeal after distressed debt investors piled in, effectively taking control.

Earlier this month, management struck a complex deal with lenders understood to include Barings, Credit Suisse and CVC that will cut Doncasters’ debt by £900m, inject new funding and see one of the group’s holding companies go into a pre-pack administration.

This will allow the operating business to be transferred to a new holding company controlled by lenders.

The move is set to be presented to a court in January ahead of a lender vote, which is all but certain to pass.