Administrators for Brymor Construction and Brymor Group have warned that there is little chance of any funds being left for suppliers and subcontractors after the south east contractor’s bank has been paid £2.85m it is due.
The administrator’s report circulated to creditors reveals details of the pre-pack deal struck with Hampshire investment company Portchester Equity to save around 110 staff jobs.
Porchester paid £400,000 for the assets of Brymor Construction on 8 July, when the £70m revenue firm was placed into administration.
It will also pay a further £1.75m for two freehold properties held by the group business, which had a book value of £2.7m.
Four directors – Graham Excell, Paul Downing, Mark Dyer and Carmen Morton – are also confirmed to have transferred over to the new buying company SH00997, along with the 110 staff with an estimated TUPE liability of £3m.
Joint administrator Michael Magnay of Alvarez & Marshall Europe warned: “Based on current estimates it is highly unlikely that there will be a dividend to unsecured creditors.”
When the group fell into administration it had been working on 13 projects across the south of England.
But project delays and deferral in the early part of this year resulted in the group’s revenue and margin being materially lower than that needed to cover fixed costs.
During this period, Brymor engaged with Portchester, which in early June tabled an initial solvent offer for the business.
During due diligence, directors raised concern about a several adjustments to historic trading results, which resulted in a materially adverse statement and led Portchester to withdraw its initial offer on 22 June.
The next day directors filed a notice of intention to appoint administrators.
The firm was unable to meet payroll commitments on 30 June leaving staff without one month’s pay, estimated to total around £88,000.
Portchester later agreed a revised offer for the insolvent business assets, deemed by administrators to be the best outcome for creditors.