Styles & Wood creditors likely to receive only 1p in the £ remuneration

Fit-out specialist Styles & Wood had debts of around £100m when it collapsed into administration in February this year.

The Sale-based business entered administration on February 28.

A report by business advisers and the company’s administrator, EY, has estimated that the total deficiency of the business was £96.56m.

It said the company’s underperformance and subsequent insolvency was predominantly driven by significant losses in its projects division, most notably its refurbishment contract at Liverpool’s iconic India Buildings, which led to a loss of more than £12m.

This was was compounded by further losses on its Mosley Street and St Ann’s contracts which incurred a combined loss of around £7m.

The company received significant shareholder support in the second half of 2019 and the cash pressures were initially alleviated by additional shareholder funding of around £16m which was injected between September and December 2019.

This is in addition to approximately £15m funding provided in May 2019.

The group developed a turnaround plan to present to its financial stakeholders to obtain additional funding for the business.

However, the plan was not deemed supportable and it became clear that the company was unable to avoid insolvency.

Prior to administration, the directors had sounded out the possibility of a sale of the business and assets of the company’s frameworks division, but no offers were forthcoming.

Following administration there was limited interest in acquiring the business and no offers were forthcoming, the report said.

Immediately after the joint administrators were appointed, 216 of the 270 staff employed were made redundant.

The report reveals that non-preferential creditors are owed around £53.8m, comprising £20.9m to trade creditors, £500,000 to HMRC, and £32.4m owed to group companies.

It owed its secured creditors, its main lenders HSBC and Tosca, approximatetly £49m.

EY’s report says creditors are likely to receive only one pence in the pound in remuneration.