IVA sale allows Paymex to pay £17m of debt

DEBT management group Paymex raised £17.3m from the sale of its Blair Endersby debt advisory business in April, with the proceeds being used to pay down its debt pile.

The sum is revealed in the company’s 2010 accounts, which have just been filed at Companies House.

Blair Endersby had employed around 80 people at Paymex’s Manchester headquarters who were responsible for around 14,000 clients who had signed up for individual voluntary arrangements (IVAs). However, following the sale purchaser Grant Thornton incorporated its operations into its own IVA unit based in Belfast.

The document shows that Paymex will make a net gain of £7m from the sale. However, the entire £17m sum has been used to repay part of the £32m it owes to Landsbanki Commercial Finance. This debt was secured against future receipts from both the company’s debt management and IVA books.

Following the payment, the Landsbanki loan was extended for a further 20 months.

Paymex also operates debt management plans under the Baines & Ernst brand, a bankruptcy advisory business known as Baker Evans and a pre-paid credit card service called Evolution.

During 2010, the company saw its sales drop 10% to £28.2m, which it blamed on difficult conditions in the IVA market.

Earnings before interest, tax, depreciation and amortisation increased by 32% to £3.3m, but once amortisation and interest charges were added in the company declared a £2m pre-tax loss.

Paymex is owned by its chairman and founder, Terry O’Neill.