Something strange is going on at the motorcycle helmet maker Ruroc, and I can't quite figure out what, though it revolves around it going into administration—ala KTM—and then the company somehow buying itself. If you're confused, so are we.
Our friends over at Visor Down were the first to report on the strange goings on at Ruroc, but described the situation quite well, stating, "Helmet maker Ruroc has gone into administration, only to apparently have been rescued by itself." The whole thing started when Ruroc Limited went into administration, which is a fancy term for a company being just before bankruptcy, and looking for a solution to stop that outcome. An administrator from PricewaterhouseCoopers was then appointed, and within a week, Ruroc was sold to Tytan PG Limited.
That name shouldn't sound familiar to anyone, as the company was less than a week old itself. But here's the twist; Tytan PG Limited is wholly owned by Ruroc Global Holdings Limited. Do you remember that scene in Austin Powers where Austin goes, "Oh no, I've gone cross-eyed."? Yeah, that's us right now.
According to PricewaterhouseCoopers, "Following our appointment, the Joint Administrators completed a sale of substantially all of the Company’s business and assets to Tytan PG Limited (“the Purchaser”), a newly incorporated entity wholly owned by the ultimate parent company company Ruroc Global Holdings Limited. All employees of the Company have transferred to the Purchaser on completion." At least there aren't any layoffs, at least not yet.
But what's with the shell game of company names and holding companies? Well, it all may have to do with Ruroc owning folks and creditors money, as PwC's documents state that "The Purchaser intends for the business to continue to trade as normal, therefore if you are a supplier who has any questions regarding your ongoing supply, please contact your usual contact at Ruroc Limited with regard to ongoing supplies to the business."
However, PwC adds, "Based on what we know currently we expect that there will be a distribution to unsecured creditors of the Company via the prescribed part only (an amount set aside for unsecured creditors from floating charge funds in accordance with section 176A IA86 and the Insolvency Act 1986 (Prescribed Part) Order 2003). It is too early to give an indication as to what the likely level of return for unsecured creditors will be." All that means is there are likely creditors that Ruroc owes money to, and that PwC isn't sure how much will inevitably end up in their hands once the dust settles.
Likewise, this type of holding company swap could, theoretically, help reduce Ruroc's exposure to those creditors' calls for their money back, as it isn't the same Ruroc they began business with. But what does that mean for the future of Ruroc?
Again, thankfully, no layoffs are mentioned, and the business is seemingly still going at present, albiet under "new" management and ownership. What's that look like into the future though? That's still murky.
