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City Link set to make redundancies on New Year's Eve

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Troubled courier City Link is set to make at least 2,000 staff redundant on New Year's Eve, after entering administration on Christmas Eve.

Investment firm Better Capital, who bought the company for £1 from former owners Rentokil Initial in 2013, released a statement this morning (Monday).

"The directors very much regret the impact on the employees of City Link receiving such bad news on Christmas Day."

"In the Company's Interim Financial Report as at 30 September 2014, the Board reported that City Link was experiencing a continued lack of profitability and that various options to maximise the value of the investment were being considered."

The RMT union is campaigning for the Government to nationalise City Link, to protect the jobs of its 2,700 staff and estimated 1,000 self employed drivers who do not work directly for the company.

After a meeting with administrators on Saturday, the RMT's Mick Cash, General Secretary, said: "It is crystal clear from today's meeting that there has been a truly horrific catalogue of mismanagement at City Link and that staff and their union have been starved of basic information while a plot was hatched to publicly collapse the business on Boxing Day when in fact it was already declared insolvent.  What a despicable and callous ‎manipulation of thousands of workers and their livelihoods over Christmas as the venture capitalists cut and run leaving a trail of chaos and misery in their wake. 

"Vince Cable has said he will meet us in the New Year. Clearly that is too late and the business will have been smashed to pieces by then as the asset strippers hover like vultures over the corpse."

“We want to put a plan together for a government-backed rescue that protects the business and the jobs it supports. If the government can nationalise the bankers then they can nationalise City Link, which is clearly in the public interest.”

It is still unclear where drivers working for City Link under its owner driver programme stand, with many sub-leasing liveried vans from the company via Lex Autolease.

According to the Guardian, EY said these drivers would be “unsecured creditors” of City Link and therefore not entitled to any redundancy payments. 

A statement from administrators Hunter Kelly, Charles King and Tom Lukic of EY on the company's website said: "The business has ceased to accept new parcels from customers and its depots will remain open for a short period of time to enable customers or intended recipients to collect parcels. 

"Those customers who placed parcels with City Link on Christmas Eve for delivery are urged to go to the depot to retrieve their parcels as soon as possible. Any intended recipients who have been notified of a failed delivery are also urged to go to the depot to collect their parcel as soon as possible. The depots will reopen following the Christmas holiday break on Monday 29 December 2014 to enable parties to collect parcels.

"City Link will no longer be able to deliver any further parcels and customers are urged to make alternative arrangements for future deliveries."

Depots are open this morning for customers to claim any of the estimated 1m parcels still within the network.

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