According to the Northern Echo, the CVA was approved by creditors in respect of AEI Cables. Despite laying off 120 workers the firm now has a survival strategy. This has in effect saved the remaining 189 jobs at the firm.
AEI Cables, based at Birtley, County Durham, has suffered since the increase in price of its raw materials, particularly Copper. See our earlier blog on the subject.
So how does the vote work? 75% of the creditors (by value) who vote need to approve the proposal. This means they will receive a dividend on their debt, which may be in the region of 40p in the £1, paid to them over a period of 3-5 years.
The firms chief executive Clive Sharp said: "We cannot express enough how sorry we are to have to lose 126 of our colleagues but we were advised that this was the only option to save the company and the jobs of the other employees."
The amount received in redundancy for the workers is calculated by the DBIS. Please see this page for details.
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