Administrators have been called in to sound the death knell on a Black Country engineering group founded more than 60 years ago.
Hampson Industries, with its head office in Brierley Hill, has seen its US factories immediately sold off in a pre-pack deal organised by the administrators.
It brings to an end 18 months of agony at the company, weighed down by massive debts and production woes in the US.
In February the management started looking for a buyer after the value of its assets fell to less than half of its share capital. In July trading in its shares was suspended and shareholders were warned there was no value left in the business for them. They are unlikely to benefit from the sale of its businesses following the administration – that money will mostly go towards paying off its debts.
In the space of just five years Hampson Industries has gone from a major force in aerospace engineering to a collapsed company laden with debt.
Shareholders who saw the firm valued at £295 million in September 2008 were today left with nothing. It is a sad and miserable end for a company started up in the shadow of the Second World War, 65 years ago.
Founded by Thomas ‘Tommy’ Hampson Silk, Hampson Industries started out as an electrical engineering firm, based at a factory set up in a converted chapel in West Bromwich. It produced emergency generating sets for the booming post-war reconstruction industry but, as it grew and prospered, it moved into the aerospace field, making jet aircraft starting equipment.
By 1966 the company floated on the London Stock Exchange and in the 1980s it started to expand but, tragically, Tommy Hampson Silk never saw this – he and his wife, Catherine, were killed when their Lear jet crashed in France in 1981.
At the time he was chairman of Hampson and Black Country engineering group Hill & Smith as well as vice chairman of West Bromwich Albion. He also owned Halfpenny Green Airport.
The company went on to become a successful engineering business with factories across the West Midlands and the wider UK. In the early 2000s an ambitious plan was drawn up to create a firm concentrating on the burgeoning aerospace industry.
The company began selling off smaller factories and started buying up aerospace operations in the US. For many, it was this ambition that laid the seeds for its future problems as the company took on large debts in order to expand.
By 2010-11 turnover was up to £197.5m and Hampson employed 1,400 people – nearly all of them in the US. In the UK it had just a few factories left as well as its dozen-strong office staff at its headquarters on The Waterfront at Brierley Hill. It was specialising in aerospace tooling and the manufacture and assembly of aircraft components made of composite materials.
But at a shareholders meeting in 2010 Tommy’s son Graham Hampson Silk was among those criticising the management of the business. Mr Hampson Silk sold his remaining shares for around 70p each. He said today: “It has suffered from bad decision after bad decision. “They have concentrated on aerospace, one of the few successful sectors in recent years, and yet the remaining shareholders will be left with nothing. It’s an absolute disgrace, a totally miserable story.”
“My father worked his socks off building the business but he would have been quite practical about it, he would have backed my selling up my shares.” At their peak Hampson shares had reached around £7.50 apiece.
Hampson Industries ran into legal trouble in 2010 when a consortium of private investors led by Midlands entrepreneur David Grove sued the firm alleging “fraudulent misrepresentation”.
Hampson lost the subsequent court case, in which it was alleged it had sold a business to Mr Grove and his partners without revealing one of its biggest customers was about to walk away. The company had to pay out £1.5m in a settlement.
Last year, as it tried to reduce its massive debt, Hampson sold off four businesses in a £51.5m deal, but it still had around £57m of debt hanging around its neck.
In February the company announced it was putting itself up for sale and this summer it warned shareholders their investment was probably worthless as it failed to find a buyer.
In July trading in Hampson shares was suspended on the stock market.
Over the weekend the company announced it had sold its last UK factory, Wigan-based BHW Components, for £2.36m and yesterday Simon Kirkhop and Chad Griffin of FTI Consulting were appointed as joint administrators.
They promptly sealed the pre-pack sale of the US operations to private equity group American Industrial Partners. Factory operations in India are also up for sale, and the future for the staff at Hampson Industry’s Waterfront offices looks bleak.