SHARES in Dawson International were suspended yesterday morning putting nearly 200 Hawick jobs under threat.
Directors of the company, which owns the town’s cashmere mill Barrie, are now taking advice from lawyers and pension experts on whether they should go into administration.
In a statement issued yesterday morning Dawson said: “Following conversations between the directors and the trustees of the UK defined benefit pension plans, the actuary of the plans has served notices of a determination of contribution jointly on the parent company and its UK trading subsidiary, Dawson International Trading.
“The directors of each company will consider these notices with their advisors to determine whether these notices are valid and whether it is necessary to appoint administrators for either or both companies.
“Pending this decision and therefore pending clarification of the parent company’s financial position, the directors have requested that the shares in Dawson International be suspended.”
A spokesperson for the company explained the notices were essentially asking Dawson for a “significant” sum towards its £50million pension deficit.
And she said: “They are taking advice to see whether the notices are valid and once they have that advice they will make the decision on whether they appoint administrators or continue trading.”
Dawson warned at the end of last month it may be forced into administration after its request to put its pension plans in a protection fund was turned down.
Once a textiles giant, Dawson International now owns only the luxury cashmere knitwear mill Barrie in Hawick which employs 180 workers and a US subsidiary which will not be affected, the company said yesterday.
Talks have been ongoing between Dawson, its pension plans’ trustees and the pensions regulator since the end of July in a bid to agree a payment scheme on the company’s pension deficit with its 3,200 pensioners, many of whom are former Borders employees.
The 140-year-old textile group once employed 12,000 people and owned the iconic Borders companies Pringle of Scotland and Ballantyne Cashmere.
One former employee, who worked for nearly three decades at Pringle and latterly Barrie, was concerned but had received letters from the company last week saying negotiations were ongoing.
“It seems to be a bit of a stalemate, it’s all up in the air at the moment, “ she said.
“Barrie is in a good position, it makes a profit but what’s happened is that when Dawson was in its heyday in Hawick there were about 12,000 workers and they’ve got about 3,000 people drawing their pension and only 180 workers in Hawick now having to pay for the 3,000. It was never going to add up.”
Yesterday local MSP John Lamont said: “This is worrying news. To suspend the shares of the company is a very serious step to take and shows just how close they are to going into administration.
“Dawson International is a strong company with a solid foundation but their pension scheme in its current form is simply unsustainable.
“They have tried their utmost to renegotiate a fair deal but despite this the Pension Protection Fund and Pensions Regulator have chosen to reject it.
“The priority in this situation must be to secure the 200 jobs that Dawson International provides to Hawick. They are a key employer and it would be disastrous to see so many families lose their livelihoods. The pension deal offered by Dawson International was a better one than insolvency would provide and it seems ludicrous that this was rejected when administration is now a real possibility.
“I hope that the Pension Protection Fund and Pensions Regulator see sense and re-enter negotiations with Dawson International. We need urgent action if we are to avoid seeing a key pillar of our local economy fall into administration.”
Last year Dawson sold its bed linen business for £6million, its third sell-off in two years, in an attempt to help plug the pensions debt which left the company with just Barrie and its American arm sourcing cashmere garments from China.
Dawson disposed of Pringle of Scotland in 2000 to the Fang Brothers, who closed the Hawick mill with a loss of 80 knitwear workers’ jobs in 2008.
It sold Ballantyne Cashmere, which employed 220 people, mostly at Caerlee Mill in Innerleithen, in 2004.