£600,000 bad debt brought down 50-year-old manufacturer

A Leicestershire manufacturer that had been trading for over 50 years and fell into administration earlier this month will leave the vast majority of its creditors out of pocket.

According to documents seen by TheBusinessDesk.com, Sapcote Engineering, which was based in Broughton Astley and called in administrators from FRP Advisory on January 10, was brought down by a bad debt of around £600,000 in the middle of last year.

To try and mitigate against this, bosses at Sapcote undertook a number of cost-cutting measures and tried to bring forward orders with major customers – but were unable to raise enough cash to pay creditors and so decided to try and market the business for sale by way of a pre-pack deal.

However, trading the company while in administration was deemed unviable without funding for payroll and to buy materials. Parent company, i3 Group Solutions, refused to fund Sapcote.

The firm was marketed from November 21 last year, until December 21, with 36 parties expressing an interest. This number was whittled down to one buyer, Olympic Oil, backed by a well-funded US conglomerate, which paid £120,000 for the business and its assets.

Sapcote owed almost £940,000 to trade creditors and HMRC when it called in administrators. Administrators say that unsecured creditors are unlikely to receive any of the cash owed to them.