Motor maker collapsed with deficit of £2.89m
ELECTRIC motor maker Saietta’s Sunderland operation collapsed with a deficit of £2.89m, new documents show.
The developer of powertrain systems for smaller electric vehicles such as scooters and rickshaws called in administrators earlier this year after failing to find a buyer amid cashflow issues.
Bosses took the decision after an anticipated contract to build electrical steering pumps at the firm’s Wearside site fell through and start dates for other pieces of work were delayed.
The difficulties came only months after AIM-listed Saietta secured £6.5m in equity funding – a sum that was expected to give it enough working capital to continue trading to March this year.
Further fundraising was expected after the new work commenced, but on March 4 chairman Tony Gott announced to shareholders that while there had been genuine interest in the business, no viable offers were made which would allow it to continue trading.
Accounts for the wider Saietta Group, covering the year to the end of March 2023, show operating losses of £19.3m on revenue of £2.1m. Having acquired the former ZF factory at Houghton-le-Spring in 2021, and taken on some of the firm’s staff, Saietta aimed to build on its research and development activity to produce up to 100,000 electric propulsion motors each year.
But with a sale process having failed, insolvency specialists from EY were appointed at the same time Saietta confirmed its shares on the London Stock Exchange would be suspended.
At the time, Mr Gott said: “Despite all other aspects of the business remaining in progress and following major restructuring throughout the business over the last 12 months we were unable to provide the capital required, on a timely basis, to complete the journey to bring the Group to a self-financing position.”
Newly-published documents covering show a list of around 23 creditors owed more than £3.1m, including a majority owed to other Saietta Group companies.
The administrators estimate a deficiency of around £2.89m.
A separate progress report, made public earlier this month, includes detail on the lead up to the collapse. Administrators at EY said: “Initially a discreet marketing process was commenced, limited to six parties, following guidance in respect of the AIM rules.
“However, by February 22, 2024, with no immediate proceedable interest from the initial process, the directors of Saietta Group Plc decided to open the process to the wider market and a regulatory news service announcement (RNS) was issued stating that the group was undertaking a formal review of its strategic options, as without further funding the group was at risk of becoming insolvent. Following the RNS, EY approached more than 70 parties to gauge their interest in the opportunity to acquire the group’s business. However, by March 3, 2024 there were still no proceedable offers.
“In the meantime, EY’s contingency planning work had prepared for potential insolvency appointments over the companies in the event that a solvent transaction for the sale was not achieved. With creditor pressure increasing, liquidity decreasing and no proceedable solvent offers received, the board decided it had no option for Saietta Group Plc and Saietta Sunderland Plant Limited other than to seek the protection of administration.”