The full story of how once booming car company went under
Surface Transforms was once praised as a 'world class manufacturer' and handed a boosting loan by Mayor Steve Rotheram's Combined Authority - before things started to go wrong12:40, 06 Jul 2026A Merseyside. . .
Surface Transforms was once praised as a 'world class manufacturer' and handed a boosting loan by Mayor Steve Rotheram's Combined Authority - before things started to go wrong12:40, 06 Jul 2026A Merseyside supercar parts firm that was left on the brink of collapse after it lost its biggest customer was pushed over the edge by an electricity and rent bill, a new report has revealed. Surface Transforms collapsed into administration in April, weeks after losing its biggest contract. TheKnowsleycompany made hi-tech brakes for supercars, with customers including US giant General Motors, as well as Mercedes and Tesla. But it remained loss-making for years and after it secured a giant new contract from GM, it secured a loan of more than£13m from the Liverpool City Region Combined Authorityto help it expand its factory to meet the demand. Now a new report from administrators Alvarez & Marsal Europe (A&M) has revealedwhat went wrong with the GM deal . The report also shows that Surface Transforms collapsed owing £38m – including more than £13m to Liverpool City Region Combined Authority. Its creditors now have to wait to see how much money they will get back. The administrators’ report details the history of Surface Transforms, including the three years leading up to the company’s collapse. The company was founded in 1999 to make “high performance, lightweight brake discs, suitable for high-performance vehicles”. Customers included GM, Mercedes and Tesla. But the A&M report notes: “Despite the high quality of its finished product, the company has faced significant challenges in delivering consistent volumes at production yields sufficient to generate profits. As a result of these production challenges and the need for consistent investment in both research and development and capital assets, the company was loss making. ”In 2023, the company won a major contract with GM that meant it would have to “deliver materially higher production volumes compared with the outputs which had previously been achieved”. That year the company agreed the £13. 2m loan with the Liverpool City Region Combined Authority to invest in the extra capacity needed to meet the GM contract. Work on the GM contract started in 2024 and was set to run until 2030. The contract meant revenues soared from £8. 2m in 2024 to £18. 3m in 2025, with GM making up 85% of that revenue. But according to A&M: “The company experienced significant challenges in implementing the operational improvements needed to meet the increased production volumes, and the company was unable to achieve the production yields required to trade profitably. ”That meant that in 2025 it reported a full year loss of £10m, and had to be backed by £13. 3m in prepayments from GM itself. However A&M said: “Given the FY25 performance, and the level of funding support required by the company, in March 2026 GM took the decision to terminate the contract early. Notice of termination was served on the company on March 3, 2026, and GM advised that no further funds would be paid under the contract, with any amounts owed to the company being offset against the £13. 3m unsecured prepayments. ”A&M said that put the company at risk of insolvency and said directors immediately took advice from law firm Gateley. That same day, A&M began working with Surface Transforms to see whether the business could be sold or saved. Within hours the company was hit with another bill. The A&M report said: “The landlord was owed a significant level of arrears, as electricity for the site was provided under the lease, and the company's energy requirements were substantial. “On March 4, 2026, the company received a demand from the landlord for payment of approximately £0. 7m by March 13, 2026. ”A&M worked with lawyers Gateley as the company negotiated with the landlord. But it said: “Ultimately, no agreement was reached with the landlord and the company was not able to meet this payment. ”On March 12, the company filed a Notice of Intention to appoint administrators (NoI). That move means a business is temporarily protected from creditors’ demands. Administrators contacted dozens of potential buyers and ultimately filed two more NoIs to give them more time to do a deal. But by the time that third notice expired on April 22, only one party was still in the race and had not yet made a formal offer – so Surface Transforms went into administration due to “the lack of any viable alternative”. When Surface Transforms went into administration it had 142 employees, but 75 of them had already been temporarily laid off “and had been notified that they were likely to be made redundant”. They were made redundant immediately. The remaining 67 employees had been kept on so the factory could keep producing for other customers. At the time, the ECHO spoke to Surface Transforms workers, who said news of the administration had caused "murder" amongst the team, with people "kicking off. "One former worker was less than complimentary about the company and the way staff had been treated, saying: "If they’d asked me to go back in they know I’d have told them to shove it where the sun don’t shine”. Another worker, who was made redundant himself, described desperate scenes at the time. He said: "You had people begging to stay. . It was horrible to see – people who expected to stay because they’d been there years. “I’ve never ever known anything like it. I’m glad I got made redundant. "The A&M report says that after an agreement was reached with another unnamed Surface Transforms customer to continue supplying products, the remaining workers were recalled on April 24. But on May 1 the customer said it no longer needed Surface Transforms to continue production, and so 52 employees were made redundant. The report says A&M had been in negotiations with an unnamed potential buyer, which it called Party A. It says Party A did offer as much as£2. 3m for Surface Transforms, but that it delayed providing evidence of funding. In the meantime an offer was received from newly-formed company CCST, whose director was ST’s former chairman Ian Cleminson. ST’s CEO Kevin Johnson also later became a CCST director. A&M ultimately decided the offer from Party A “was insufficiently progressed and subject to substantial execution, value and deliverability risk”, and so completed the £1. 5m deal with CCST on May 22. A&M estimated that if Surface Transforms’ assets had been sold separately then they would have raised a maximum of £1. 15m, meaning the CCST deal offered more money to creditors. The report shows Surface Transforms currently only has £1. 85m available for potential creditors. In total, Surface Transforms owes the Combined Authority (CA) £13. 6m. The CA has first rights on £152,180cash in a blocked bank account, which administrators say it will get back “in due course”. But it is not yet known how much of the remaining millions it will get back. A Liverpool City Region Combined Authority spokesperson said: 'As custodians of public money, the Combined Authority is extremely diligent when considering investments and enjoys an excellent record of repayment, often generating returns that are reinvested in the local economy, while driving business growth, job creation and regeneration. However, any investment comes with inherent risk. ‘We believe the sale of Surface Transforms as a going concern was the best possible outcome under challenging circumstances and we engaged fully to help secure a future for this innovative advanced manufacturing factory and its skilled workforce. 'We are still working to recoup as much money as possible. ’The other secured creditor in the administration is Liverpool-based finance firm River Capital, which is owed £140,459 by Surface Transforms. Article continues belowThe administrators’ report says: “Based on current estimates, we anticipate there will be a further distribution to the secured creditors. However, it is not currently possible to estimate the quantum or timing of any further dividend until final realisations and costs are known. ”It owed £24. 7m to other unsecured creditors. That includes £14. 4mowed to General Motors, £3mto DMG Finance, and £1. 5m to Knowsley Image Business Park. The company also owes £1. 65m to employees.