Sheffield Forgemasters International Limited (SFIL) will meet a two-year promise to its employees by giving them the opportunity to own a share of the company.
Management at the 200-year-old company, led by chief executive Graham Honeyman, made the commitment to its 700-strong workforce when it completed a management buy-out (MBO) two years ago.
The government’s Pension Protection Fund (PPF), acting on behalf of the pension scheme trustees, negotiated a financial agreement which saw the company’s pension fund deficit reduced at the time of the MBO.
The groundbreaking MBO saw the establishment of a scheme whereby the pension scheme trustees and the administrators PricewaterhouseCoopers (PWC) were given, amongst other things, a 30% equity stake in the company in return for offsetting specific liabilities including its insolvent pension fund.
Forgemasters has now secured agreement with the pension scheme trustees and PWC by which SFIL will buy back that 30% shareholding. SFIL intends to split that shareholding between its entire workforce.
Under the agreement, employees will be offered the chance to buy shares at half their present value and at preferential lending terms.