DX Group to buy some City Link assets in £1.125m deal
Delivery firm DX has confirmed that it has agreed to buy some of the assets of collapsed parcel carrier City Link. DX Group said yesterday that it has struck a deal with City Link’s administrators to buy “certain City Link assets” including cages, scanners and soem intellectual property rights for £1.125m in cash.
City Link went into administration on Christmas Eve as its private equity owners Better Capital decided to stop supporting the business, which has been loss-making since 2007.
On New Year’s Eve, administrators Ernst & Young confirmed that 2,356 of the parcel carrier’s employees have been laid off. 371 were retained temporarily to help wind down operations.
Commenting on his company’s offer for City Link assets, DX Group chief executive Petar Cvetkovic, himself a former City Link managing director, described the situation as “very sad”.
“The Administrators are now proceeding with an orderly sale of assets and we have made a limited investment to acquire certain assets,” Cvetkovic said.
“We are also doing all we can to provide opportunities for former City Link employees and contractors and to offer solutions to Customers who may need a new carrier.”
DX
Buckinghamshire-based DX Group delivers about 170m items each year in the UK and Ireland, through services ranging from next day delivery for mail and parcels to two-man deliveries and secure deliveries.
DX has been operating since 1975, raising £200m when it floated on the Alternative Investment Market of the London Stock Exchange in February this year.
The company acquired the £123m-turnover overnight parcel and freight logistics firm Nightfreight in March 2012.
City Link had been making losses ever since its troubled merger with parcel carrier rivals Target Express in 2007.
Hunter Kelly, one of the Ernst & Young administrators for City Link, said following the announcement of the DX deal that further City Link assets will be sold off in the near future.
He said: “This transaction represents our first step in realising the value of City Link Limited’s assets. We will continue this process over the coming weeks, alongside conducting an orderly wind-down of the company’s operations.”
“Fire sale”
The Rail, Maritime and Transport (RMT) workers union said last night that the DX deal was a “fire sale”.
RMT general secretary Mick Cash said it was “outrageous” that the union was being denied consultation when ther ewas “a chance to rescue jobs out of the wreckage”.
“RMT is fighting on for justice for the City Link workforce and we are calling again for direct talks with all of those pulling the strings, including Vince Cable and the Government, to see just what can be done for the thousands of workers still left facing personal ruin,” said Cash.
