Better Capital-backed City Link enters administration

The business has confirmed via its website that EY has been appointed as administrator.

Better Capital expressed regret at the timing of the news, which was reported widely in the UK media on December 24. It said it had intended to release a statement shortly after Christmas, but the news of EY's appointment had been leaked to the media beforehand.

The GP cited a "continued lack of profitability" as the reason for the business's demise. It also stated the investment is to be written down by 50% to £20m, based on an estimated liquidation valuation basis.

Better Capital acquired City Link from Rentokil in a turnaround deal in April 2013, with capital drawn from the £355.6m BECAP 12 Fund. The GP invested £40m in the delivery service in order to finance the deal and fund the business's restructuring.

EY issued a statement to confirm 2,356 staff would be made redundant, with media outlets reporting a further 1,000 contractors will lose their jobs without being included in the process. Around 370 staff will be retained for a brief period to enable undelivered parcels to be collected from the company's depots.

The Coventry-based delivery company, which was founded in 1969, had a headcount of around 2,700 before going into administration.

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