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Pengco shut up shop
Page 4
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DEMOUNTABLE bodybuilder Pengco has gone out of business despite having money in the bank. The Peterborough company claims it has been pushed out of business by a quirk in the tax laws.
On Monday the receiver was called in and began the job of selling up. The UK manufacturing rights, the marketing rights, patents and copyrights of all Pengco products are being offered.
The company blames a financial reorganisation in 1973 for the current situation.
The restructuring turned a C92,000 running loss into a £38,000 profit and a programme of absorbing inflation and huge wage awards took them in 1976 with a solvent balance sheet. But in the meantime tax liabilities had undermined the financial base of the company which had been established to allow the 1973 rescue operation to go ahead.
The base was built on a director's interest in a land bank at the back of the Pengco premises which would have been sold in the event of financial trouble.
It was originally planned to liquidate the company by means of voluntary liquidation which would have allowed all creditors of the company to be paid within 12 months, but an other tax quirk would have brought it trouble with the land through payment of Capital Gains Tax.
As a result, the company's security at its bank was reduced to a level which was unacceptable and it became impossible to reconstruct the financial base of the company.
A statement from the company issued on Tuesday said that like the rest of the transport industry it had been making profits "on an intermittent basis."
"The board decided that in the interests of both protecting the shareholders and providing continuity of its range the only course was to ask for the receiver."