More than 300 subcontractors and suppliers of failed cladding group Astec are unlikely to see a penny owed to them.
The latest creditors’ report from administrator Deloitte reveals that the three main businesses Astec Projects, Astec Group and Concept Design (Interiors) owe unsecured creditors £12.2m.
Of this sum, £7.3m is owed to suppliers and subcontractors, with a further £2.8m owed in intercompany debt.
Deloitte estimates that when they took over on 11 April this year around £1.7m was being held by clients and contractors in retentions. A further £5.6m due for work in progress is now unlikely to be recovered.
Administrators said that they expect to be able to pay Barclays Bank from sales of property proceeds but have warned there is precious little chance of any cash being left in the pot for subcontractors and suppliers.
Richard Hawes of Deloitte said also warned that it is not clear whether staff will receive any of the £180,000 owed to them.
According to his report, Astec ran into catastrophic cash flow problems after seeking to quickly grow the business last year.
Astec was formed in 1994 and specialised in the design, supply and installation of external building envelopes.
Up to 2012, the business had grown to £30m sales and was trading profitably.
The directors decided to grow the business further after several contract opportunities arose and during 2013 recorded sales of £45m.
But the group’s management resources became strained and it was unable to fund the additional working capital requirements of the enlarged business.
A winding up petition filed by an angry creditor prevented the directors from appointing an administrator, which then prompted Barclays Bank to act and call in Deloitte.
Deloitte approached several potential buyers for the business, but was turned down and laid off all 85 staff over a two-week period.
The firm operated from a freehold head office in Reading and satellite offices in Newport, South Wales and Burntwood, Staffs.