Collapsed gas shipping business owed £82m
Joint administrators of CNG Energy, which collapsed last November with the loss of 145 jobs, say the business owned £81.7m to creditors.
A report published by Interpath Advisory, which was hired in September to explore sale, refinance and investment options for the struggling Harrogate-based business, confirmed the company’s inability to meet its liabilities was mainly due to the loss of four key customers.
These customers represented about 80% of CNG’s customer base and the firm was unable to absorb the resulting bad debts and loss of revenue. Becoming the 19th energy supplier to fail in 2021 after a surge in wholesale gas prices made it uneconomical for many providers to continue to trade.
According to draft management accounts as of 31 August 2021, the wholesale gas supply company had net liabilities of £19.9m and an operating loss of £464,000.
A cash flow forecast prepared in October indicated CNG would be unable to pay its debts as they fell due from 14 October 2021, when payments totalling £17.2m were due to be processed and the company’s bank balance was £8.7m.
Interpath’s report notes: “Based on current estimates, we anticipate secondary preferential creditors will be paid in full. However, we are not yet able to confirm the timing of a dividend.
“We consider that HMRC, being the sole secondary preferential creditor, has a claim of approximately £3.6m.
The report added that it was “likely a distribution will be made to unsecured creditors” but noted no timings for such action could be confirmed.
The administrators have estimated about £45.5m (including amounts to be final billed) were owed to CNG as of 17 December 2021. With this figure including “high volume of significantly aged debt”, with a number of the CNG’s customers having also entered into insolvency processes.
To date, £0.5 million has been collected, with only 10% of this received.
In addition to the creditors Interpath said it is aware of some legal claims brought against CNG relating to matters that occurred prior to its appointment.
With the report stating: “The records held by the company in respect of these claims have been retained and we are working with our legal advisors and the company’s pre-appointment advisors to understand the current position and agree a strategy together in relation to these claims.
“We are reviewing the affairs of the company to identify any actions which can be taken against third parties to increase recoveries for creditors.”
