City Link administration: Most jobs to go on New Year's Day

 
Emma Haslett
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City Link went into administration on Christmas Eve (Source: Getty)

Most workers at City Link are expected to be made redundant on New Year's Day, they have been told.

An internal document seen by Sky said it is unlikely to be able to make termination payments - "however, you may be entitled to make claims to the Redundancy Payment Service".

The news came on the same day Better Capital, City Link's largest shareholder, said it "regrets" that staff found out about the courier's administration on Christmas Day.

In a statement to the stock market this morning - the first time the market has opened since the beginning of the Christmas period - Better Capital said it was "disappointed" by City Link's administration, and that its directors "very much regret the impact on the employees of City Link receiving such bad news on Christmas Day".

Unfortunately the appointment of an administrator was leaked to the media ahead of the intended announcement.

It added that City Link had warned in its last financial report it was "experiencing a continued lack of profitability and that various options to maximise the value of the investment were being considered".

At the time, Better Capital took a 50 per cent writedown on its stake in the company.

The company called in administrator EY on Christmas Eve, putting all 2,700 jobs, plus another 1,000 contractors, at risk.

Although talks between EY and union officials were held on Saturday, the administrator said it is likely to make "substantial redundancies", although "a portion of employees" will be kept on for "up to three months".

It added that it is "cautious" about the prospects of finding a buyer for the company.

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