Biomass failure saw company collapse owing over £9m

A supplier of wood-based pellets fell into administration after a failure to break into the biomass market saw it unable to service a £9m debt to a funder, TheBusinessDesk.com understands.

3F Pellets, of Saxilby in Lincolnshire, called in Andy Pear and Milan Vuceljic of Moorfields Advisory as joint administrators of 3F Pellets on February 22.

However, Moorfields first met with 3F Pellets in June 2022, when the secured creditor sought advice on its exit options. To bring this forward, it was decided that a review of the company’s options would be needed to determine its solvency and any potential restructuring of the debt – but 3F Pellets’ director decided not to enter into this agreement and failed to provide any information on how it would repay the debt to its secured creditor.

This is when the firm slipped into administration. Moorfields is now aiming to sell off 3F Pellets’ property assets to try and raise funds to repay the secured creditor. All staff, thought to number approximately 16, have lost their jobs.

Meanwhile, unsecured creditor are unlikely to receive any of the cash owed to them, the joint administrators have said.