NMCN collapse left creditors £115m out of pocket

Unsecured creditors of collapsed utilities contractor NMCN were owed £115.3m in total when the company fell apart.

That is nearly double what its administrators reported back in October, as revealed by Construction News. At the time Grant Thornton said the £400m-turnover company owed £60.5m to more than 2,400 unsecured creditors.

The latest report by Grant Thornton reveals NMCN owed monies to more than 3,000 unsecured creditors. They are not expected to be repaid what they are owed, according to the report, as even secondary preferential creditors will probably not be repaid in full.

The contractor fell into administration in October, after it had unveiled a string of profit warnings and a bid to recapitalise the business, backed by turnaround investor Svella, collapsed.

Selling off NMCN’s plant machinery and vehicles also enabled Grant Thornton to pay off debts to two secured creditors – Svella and Lombard – to the tune of £8.2m, the latest report shows. After its attempt to recapitalise NMCN fell through, Svella bought NMCN’s telecoms business and most of its plant machinery.

Meanwhile, Galliford Try bought NMCN’s water division and Keltbray Highways acquired parts of its infrastructure operations.

Grant Thornton also confirmed it was looking to extend the administration process by a further 12 months from its current expiration date at the beginning of October. The administrator said there are still assets which need to be identified, amounting to a “substantial” amount of work which needs to be done.

“The main areas of value to be realised relates to the sale of the freehold properties and continued debtor collections,” the report says. Secured and preferential creditors would have to approve this plan.

Last month, 26 former employees of NMCN took the firm to a tribunal over the handling of their redundancies. They all belonged to the firm’s building business, which Grant Thornton failed to sell. In total, 80 jobs were lost. The former employees could be entitled to up to £4,352 each via the government’s Insolvency Service, if their claim is successful.

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