Ecotech London’s plastics recycling plant is being disassembled after administrators failed to find a buyer willing to pay more than the company’s existing debt.
Charles King and Hunter Kelly from EY were appointed joint administrators to the firm, which ran a recycling plant in Essex, on 6 June.
The administrators said at the time the company’s entire workforce of 47 were made redundant on 31 May, prior to their appointment.
They explored expressions of interest in the company and its assets but were unsuccessful, and Ecotech left the site on 30 June.
The landlord is now dealing directly with the owners of the plant remaining on-site so they can remove it. The main piece of equipment remaining is the recycling line, which is financed by investment firm Lombard which benefitted from a buy-back guarantee.
EY told MRW that Ecotech’s arrangement with Lombard made it impossible to sell the firm’s assets.
“Any offer for the business’ assets would have had to exceed the balance on the hire purchase agreement, which our asset appraisal agents believed would not be achievable,” a spokesperson said.
Other problems EY faced in selling the firm were:
- limited times to agree a sale because of the cost of staying on-site
- significant working capital required to restart operations
- doubts from potential purchasers that the operation could be profitable
Ecotech specialised in the recycling of plastic bottles to produce PET flakes for use in products for food packaging and other industrial applications.
It suffered from the declining crude oil price, which affected selling prices and overall demand, as well as poor feedstock quality and operational issues with the plant.
The business is the exclusive UK partner of Germany’s STF Group, a European producer of recycled PET.