The future of Hellmann Worldwide Logistics rests on the success of a major refinancing deal being negotiated by its German parent company, the 3PL’s auditor KPMG has warned.
Parent company Hellmann Worldwide Logistics GmbH is in negotiations with 11 funding partners to refinance a €159m (£125m) loan, which makes up 40% of the group’s total loans.
The refinancing was set to be completed by August last year but has been put back until the end of this month.
In the company’s most recent annual results for the year to 31 December 2014, KPMG auditor Graham Neale warned: “Hellmann is reliant on the parent group for funding, which in turn is dependent on the success of the parent group’s current refinancing exercise.”
In a further note, the auditor acknowledged that the directors remain confident in the future of the company after a review of its prospects to the end of 2017 and that the company has “the explicit support of the parent group” evidenced by its injection of £7.3m of share capital in December 2015.
However, the auditor warned: “The material uncertainty relating to the delays in the group refinancing and the ability of the parent group to continue to support the UK companies may cast significant doubt on the company’s ability to continue as a going concern.”
Hellmann Worldwide Logistics’ 2014 results show that the UK group made a loss of £1.5m in the period compared with a loss of £2.2m in 2013 and had net liabilities of £2.8m in 2014, compared to net assets of £812,000 the previous year.
In the period, it streamlined its road freight division in response to a market it described as presenting the business with “a key challenge”. This saw two sites closed with the remaining work consolidated into the company’s remaining depots, resulting in a one-off administrative cost of £171,000.
Despite this, Hellmann’s road freight division delivered 4% growth in turnover, up from £26.8m in 2013 to £27.8m in the period.
Hellmann began operating Pallet Track’s international service for it last year. It also covers a number of London postcodes for the network.
Hellmann's were approached for comment.
