Wednesday 17 July 2019 4:39 pm

Astrazeneca promises cash to back up £12m redundancy payments for former staff

British-Swedish drugmaker Astrazeneca has promised to plug a £12m hole, if needed, to honour redundancy payments for a plant which it sold in 2016.

The pharma giant said it would step in if workers do not get what they are owed from Avara Avlon, which bought the plant in Avonmouth, Bristol.

Read more: GSK eyes former Astrazeneca CFO for empty chair

The move comes after pressure from unions who claimed that Astra had given a “cast iron guarantee” to step in if the plant folded within three years.

Avara went bust early last year, leaving administrators scrambling to find the money to pay of its creditors, including £12m for staff.

Steve Preddy, the regional secretary for union Unite, said that many of the workers had been with Astrazeneca for most of their working lives.

“In a grim situation where workers are losing their jobs through no fault of their own, they now have the comfort that they will be paid the correct redundancy payments,” he said.

Read more: Chinese demand for medicines helps Astrazeneca return to growth

An Astrazeneca spokesperson said: “We have decided to set aside funding of up to £12m, to be administered independently, to make sure our former employees at the Avlon site receive full severance should the ongoing administration of the site not generate enough funds to cover redundancy costs.

“AstraZeneca remained closely involved in helping secure a future for the Avlon site following the sale to Avara, which was made in good faith in 2016. We have been engaged with the receivers since the company fell into administration.”