A leading Scottish business group has alerted members of an expected shortfall to cover its rent and pension commitments.
The Scottish Council for Development and Industry (SCDI) will seek a company voluntary arrangement (CVA), a formal insolvency process.
It has written to members alerting them to imminent correspondence from Howard Smith and Blair Nimmo, of professional services firm KPMG, who have been appointed joint nominees in relation to a CVA proposed by the directors.
Move to address pension obligation
Explaining the reasons behind the move, SCDI chief executive Sara Thiam said: “Closer joint working across public, private and third sector has been a key feature of the last year.
“The Scottish Council for Development and Industry is unique in uniting all three in a shared mission of achieving economic prosperity for Scotland.
“In order to continue to deliver value to our members throughout this challenging year, we have reshaped and bolstered our team, and continued to deliver high quality events and thought leadership activity.
“We are now seeking to address the final part of the jigsaw to enable us to continue to trade and grow by addressing a pension legacy obligation.”
Donations cover costs
She added: “Approval of the voluntary arrangement will enable SCDI to continue trading for the benefit of all our stakeholders, including our employees and other creditors.
“We have taken action to ensure our members continue to benefit from our valued programme of events, policy and public affairs activity.
“Donations from our members and income from research and events cover our costs.
“However the contributions associated with a defined benefit pension scheme, which closed to employee contributions in 2004, had escalated in recent years.
“Despite making enhanced contributions over the years the board foresaw there would be a point in the future when we would be unable to meet our obligations.”
Ms Thiam said the pension fund and SCDI’s landlord, in respect of certain liabilities, were the only creditors whose debts were likely to be “compromised” by the CVA.
She added: “The intention is to pay all other creditors in accordance with their agreed terms.
“In common with many organisations who rely on events income and discretionary contributions, SCDI has experienced a reduction in income during the pandemic, which made the task of tackling our pension legacy obligations more urgent.”
What is SCDI?
SCDI, founded in 1931, is an independent membership network, representing a cross-section of the private, public and social economy sectors.
Its stated aim is to “engage Scotland and influence government and key stakeholders to ensure sustainable inclusive economic growth and flourishing communities.”
The group organises a wide range of activities throughout Scotland, including the annual SCDI Lecture, traditionally held in Aberdeen, and employs staff in the Granite City, Dumfries, Inverness and Glasgow.
