Scottish manufacturer Dawson International has taken a step closer towards administration, after it was forced to suspend its shares yesterday.
The former owner of Pringle has been warning for some weeks that it could have to call the administrators in, after proposals to manage its pension scheme – in the face of an estimated £50m deficit – fell through in July.
Yesterday, the luxury fabrics manufacturer took a step closer to the brink by revealing it had suspended trading of its shares after receiving new notices setting out the full extent of its pension shortfall.
According to a statement released to the stockmarket, Dawson’s directors are now considering whether the notices “are valid” – if they are, the announcement added, it may be necessarily to appoint administrators.
Although timescales are not clear, if no solution is brought forward it could see the loss of 200 jobs and the end of the 140-year-old business.
The company stressed that its US knitwear business, Dawson Forte, was “well-funded and continues to trade normally”, and as such would not be entered into administration.
The news follows several years of Dawson attempting to reduce the pension deficit, which is significantly greater than the knitwear firm’s £1m market cap. It had put forward proposals to address the gap, including entering the Pension Protection Fund, but this was scuppered three weeks ago when the PPF and the Pensions Regulator rejected “all offers” made by the company.
The two bodies argued that Dawson was not offering sufficient compensation to take on the burden – at the time, Dawson said it “simply has no more to offer”.