Australia-based paper merchant PaperlinX has placed its UK businesses into voluntary administration.
The company said in a statement that the decision was prompted by the continued lower demand for paper and decline in margins in the United Kingdom, the difficulty in restructuring substantial legacy pension liabilities, and the withdrawal of credit insurance.
The Administrators have observed that the UK Administration will not have an impact on PaperlinX’s day-to-day businesses and operations in Australia, New Zealand and Asia (“ANZA”).
PaperlinX CEO, Mr Andy Preece, said “the profitable Spicers businesses in Australia, New Zealand and Asia are insulated from the financial liabilities of the UK businesses. In this region, PaperlinX’s primary focus will be to continue to develop its businesses beyond paper merchanting and into Sign & Display and Packaging.”
“This has been a difficult decision for the local directors of the UK Group, but one that I believe is unavoidable given the circumstances,” said Mr Preece.
“PaperlinX has strongly supported its UK operations for many years, but despite continued efforts and the investment of significant capital over recent years, it has not been possible to successfully restructure the UK Group.”