A historic manufacturer based in Tyneside has entered a potential new phase after going into administration earlier this summer, resulting in the loss of 170 jobs. Zentia, a ceiling manufacturer with over a century of history, ceased operations at its Gateshead facilities in June amid mounting financial difficulties.
Originally incorporated on August 7, 1925, as Armstrong Cork Company, Zentia employed numerous workers across two sites in Gateshead, producing suspended ceilings for various sectors including construction, architecture, and interior design. The company had received regional business awards and maintained a prominent presence in the North East manufacturing sector.
The decision to appoint administrators from Interpath followed unsuccessful efforts by Zentia's directors to stabilize the company’s financial position. Despite attempts to secure a £6.5 million capital injection from shareholders and exploring sale options, the business faced severe headwinds. Administrators cited challenging conditions in the building and construction sector, including rising energy costs and declining sales, as key factors in the collapse.
Financial disclosures filed by the administrators reveal that Zentia owes approximately £45.9 million, with assets on the books valued at £24 million. These assets include £14 million in machinery and £9 million in inventory, while the total estimated assets available to creditors amount to £2.59 million. The company’s debt includes £20 million owed to secured creditors and £16 million to unsecured creditors, alongside trade debts totaling around £4.56 million.
However, the administration documents also indicate potential for recovery, as an offer has been received from an unnamed third party for the majority of Zentia’s business and assets, including those of its subsidiary Zentia Profiles. This offer has received support from major creditors including BNP Paribas Commercial Finance Limited, Aurelius, and Lloyds Bank Plc. Negotiations have advanced to the point where the administrators have entered into an exclusivity agreement with the prospective buyer, with the goal of completing a deal in the coming weeks.
It remains unclear whether the proposed transaction might lead to the reopening of Zentia’s Gateshead plants or the rehiring of former employees. The administrators’ report traces the company’s recent challenges, noting significant difficulties following its acquisition by a German asset manager in a broader European deal. Since then, the company has struggled with shrinking sales amid an economically pressured construction sector, downward pricing pressures, and rising production expenses.
The coming weeks will be critical in determining the future of Zentia and its role in the local manufacturing landscape.