The collapse of New Earth Solutions Group (NESG) has resulted in scores of unsecured creditors losing more than £5m.
The report to 260 creditors from administrators Duff & Phelps sets out the overwhelming burden of debt faced by the group of companies and efforts to sell them as a going concern.
As reported previously, NESG and New Earth Solutions Facilities Management were placed in administration on 7 June and five operating subsidiaries running advanced composting facilities and not in administration were sold to DM Opco two days later.
The report from Duff & Phelps indicates that the new owners bought NESG’s business and assets for £5.9m, the bulk of it for equipment and vehicles.
It also relates how the senior lender, the Co-operative Bank, had initially rejected three would-be suitors in March out of 51 that had declared an interest.
Later, an ‘interested party’ from the continent failed to firm up a takeover bid which would have realised 52p for every £ of debt.
Part of the deal for DM Opco’s purchase was the transfer of NESG’s £35m Co-op debt to the five operating companies. The Co-op told MRW it would not comment, claiming client confidentiality.
The report indicates that unsecured creditors are owed £9.2m, and have no hope of redress. Nearly £4m of that total is inter-company loans while £1m is owed to HM Revenue & Customs.
The remaining £4.2m is made up of 260 other company creditors. The biggest two, each of over £800,000, are to Bertling Enviro Ab of Sweden and AVR Afvalverwerking of the Netherlands.