Minimal pickings for WR creditors
8th January 2014
UK: WR Refrigeration owed over £80m when it entered administration in October and creditors are likely to receive only a minimal dividend, a report from administrators PwC reveals.
The list of unsecured creditors, reads like a buyers guide of the refrigeration industry with their combined debts amounting to £12,373,000.
The report also reveals that Integral paid an initial £1.8m for around 50% of the business and three of the largest customer contracts. Further amounts of up to £500,000 will be paid by Integral based on completion of contracts and collection of debts.
WR’s Finnish owners Huurre and one of its shareholders, the collapsed Icelandic bank Kaupthing, which was taken over by the Icelandic government in 2008, had provided substantial loans to the stricken refrigeration contractor. Kaupthing’s lending was about £31m but even as a secured creditor they are unlikely to be repaid in full.
PwC had meetings with Huurre and Kaupthing in the early summer of last year to discuss financial concerns in the difficult trading conditions. £1.5m was provided to manage pressure from HMRC and suppliers.
In early September, WR was provided with an additional secured loan of £2.5m by Kaupthing to explore whether a turnaround of WR was a viable option and to accelerate the search for a potential buyer.
Meanwhile, discussions with a view to agreeing a payment plan with HMRC, who were owed nearly £4m, continued. HMRC issued a winding up petition on October 10 but this was not served. Huurre provided additional funding of £500,000 to help support the payment plan but cash flow forecasts indicated that a further £2m would be needed to fund the company through to the completion of any potential sale. With no further funding forthcoming, Huurre invited Kaupthing, as secured creditor to appoint administrators on October 22.
Despite interest from over 50 potential purchasers, PwC said none showed any credible interest in purchasing the whole UK group. Following the initial sale to Integral no other offers were received and the company ceased to trade on November 1.
Of the original 600 staff, around 250 transferred to Integral and a further 50 have since transferred to various contractors following the transfer of a further two contracts.
