DX pounces as City Link starts asset fire sale
CITY Link administrator Ernst & Young yesterday kick-started a fire sale for the beleaguered parcel delivery service’s assets, as it attempted to recoup some of the investment of private equity owner Better Capital.
Rival delivery firm DX completed the purchase of £1.125m worth of assets that included cages, scanners and certain intellectual property.
Petar Cvetkovic, the chief executive of the Buckinghamshire-based DX, said: “It is very sad that City Link has been unable to continue as a going concern, particularly for its employees and contractors. The administrators are now proceeding with an orderly sale of assets and we have made a limited investment to acquire certain assets.
“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.”
Cvetkovic is the former managing director of City Link. He left the company in 2009, and last year he oversaw DX’s flotation on London’s Alternative Investment Market for £175m.
City Link fell into administration on Christmas Eve, with its administrator announcing 2,356 job losses on New Year’s Eve after a failed takeover bid from an unnamed consortium.
Founded in 1969, The Coventry-based firm employed 2,727 staff, but had seen years of losses. The company was bought by Jon Moulton’s Better Capital for £1 in April 2013, but its £40m investment was not enough to turn the troubled firm around.