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Buyout boosts Silentnight staff
Tuesday May 10th 2011
Silentnight, Britain's biggest bed maker, has been rescued from collapse, protecting more than 1,000 jobs.
The news will be a massive relief for workers at the firm who might have secured Income Protection insurance when the company was put into administration.
The Lancashire-based group, which had a £100 million deficit in its pension fund, had to go into administration after it failed to win support for a Company Voluntary Agreement.
But HIG Europe, the European division of global private equity firm HIG Capital, has agreed a deal to buy Silentnight's ongoing interests, including its brands.
Although this is great news for the 1,250 staff at Silentnight, it is bad news for pensions safety net, Pension Protection Fund, which will now probably have to take over the pension fund and its £100 million deficit.
The final salary pension fund has around 1,500 members, but only 100 still work for the group. If the pension does go into the PPF, members who have not yet retired will see the annual benefits they can receive capped at around £30,000 a year.
Silentnight had proposed a Company Voluntary Agreement (CVA) to address an "unserviceable level of historic debt" and its pension deficit, following the withdrawal of credit facilities by its bank earlier this year.
Creditor had been due to vote on the CVA this week, but despite getting support from suppliers, employees and HM Revenue & Customs, the group failed to win the backing of the Pension Protection Fund, which was its largest creditor, leading to its decision to go into administration.
Copyright © Press Association 2011
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