Cammell Laird Gibraltar Subsidiary To Continue Trading

by Ulrika Lomas, Tax-News.com, Brussels

16 April 2001

Following the announcement last Thursday by UK Cammell Laird Holdings PLC, the international marine services company, that it had asked its principal bankers to appoint a receiver at its intermediate holding company, Cammell Laird Group PLC, which is the holding company for all the operating subsidiaries within the Group, Cammell Laird (Gibraltar) has stated that it will continue to trade. The Gibraltar subsidiary says it does not have any cross guarantees with its holding company and is therefore not in receivership. They say that they intend to continue with business as usual.

That is no doubt a true statement, but the subsidiary remains under the control of the company which is going into receivership, and the liquidators will have power to dispose of their Gibraltar asset as they choose, in the interests of the bank which is appointing them. The Gibraltar company will obviously have most value as a going concern, so local workers must hope that a new owner can be found as quickly as possible.

In this kind of situation, much depends on practical considerations such as where the cash is at the moment of receivership. If the central treasury of Cammell Laird was doing its job, there won't be much more than a short-term working balance in the Gibraltar company's bank account. On the other hand, it's possible that the Group used the Gibraltar subsidiary for tax purposes to book contracts, even perhaps as an offshore treasury operation, in which case the subsidiary may have substantial assets of its own.

Could be interesting!

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