Failed construction group owed £47m

Construction group Shaylor owed £47m when it collapsed into administration in June, new documents have revealed.

210 jobs were lost when the Walsall-based business collapsed after efforts to find a rescue deal failed.

The 50-year-old family business had run into a number of problems, caused by tightening cash flow and on-site delays and disputes.

Allied Irish Bank (AIB) is expected to “suffer a significant shortfall” on its lendings of £14.5m. Ritchie and Steven Shaylor are owed £5.4m each while other directors had put in a total of £2.5m.

Large company creditors include Hartle, which is owed £820,000, £800,000 to Hannon Brothers and £700,000 to Air Cool Engineering Midlands.

AIB had funded a £13.5m loan last October to fund an employee ownership trust scheme buying 55% of the company. It also refinanced the mortgage on the company headquarters and a £2m overdraft facility.

But problems at the £140m-turnover business became serious shortly afterwards and directors put in £2m between February and April this year.

Delays and extra costs were caused by the failure of “certain key subcontractors”. Disputes about work on sites delayed income but then its failure to settle subcontractors’ bills within terms resulted in more delivery problems, which added to delays and extra costs.

FRP had been exploring options informally since February and formally since April, with an M&A plan launched in early May.

The bank refused to increase its funding, and advisers were unable to secure a buyer, even through an accelerated sale process and the short-term protection of a notice to appoint administrators.

Raj Mittal and Tony Barrell, from FRP, were appointed administrators on June 19.

They are in the process of agreeing a sale of Shaylor’s headquarters, above the guide price of £2.3m.

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