Headlam to delist from London after flooring collapse as shareholders face wipeout

Britain’s Headlam (HEAD.L) said on Wednesday it intends to cancel its London listing and sell parts of its business, after weak demand and rising material and energy costs pushed the flooring distributor into administration.

The company did not say when the delisting would take effect. The stock last traded at 11 pence on September 1, after Headlam announced its intention to appoint administrators.

Headlam announced the sale of certain assets to rival Likewise Group (LIKE.L) for £14.9 million ($19.75 million). Joint administrators from financial advisory firm Interpath were appointed, leaving shareholders expecting to receive nothing.

The carpet-maker, which began a strategic review in July, was hit by falling sales and rising costs for chemicals used to make synthetic carpets, in the fallout from the Iran war.

Headlam, which listed as Headlam, Sims & Coggins in London in 1948, said administrators explored several rescue routes but decided a piecemeal sale of certain assets was the “best and most deliverable outcome for creditors”. The sale is unlikely to meet the claims of unsecured creditors in full.

Likewise entered a nine-month agency agreement to help administrators sell Headlam’s remaining inventory in an orderly fashion to avoid disrupting the UK flooring market.

($1 = 0.7545 pounds)