Mann Construction’s trade creditors could be paid as little as a penny for every pound that they are owed, it has emerged.
A creditors report from administrators Vantis this week reveals the harsh reality facing the 573 companies owed money by the collapsed Enfield firm.
These creditors are owed £6.8 million between them, but are expected to see only a tiny fraction of their money as Mann is saddled with up to £17m of debt.
The administrators are still working through the firm’s assets in a bid to realise as much cash as possible for creditors, after deciding there was no possibility of finding a buyer.
In the best possible scenario painted by Vantis, the unsecured creditors will share a £426,000 pot of cash between them, roughly 6 pence for every pound owed.
But in the worst case, the creditors are looking at a pot of just £77,000 – or little more than 1p each for every pound owed.
Mann’s largest creditor is its bank, Lloyds TSB, which as a secured creditor can expect to receive between £1.1m and £2.5m of the £3m it is owed.
HMRC is also owed £2.5m but the taxpayer is unlikely to see that bill repaid.
The creditors report sheds more light on how the recession destroyed the civil engineering, groundwork and reinforced concrete firm, leading to 83 redundancies.
In the year to 31 August 2008, Mann had a turnover of £105m, yet the directors’ forecast turnover for the year after was just £45m.
Adminstrator Nick O’Reilly said: “The directors informed us they were unable to restructure overheads quickly enough to compensate for the decline in turnover, and consequently this led to pressure on cash flow and trading losses.”
At the time of the firm’s collapse, Mann had 38 existing contracts. Where possible, these have been put back out to tender.
One of the firm’s biggest contracts was to provide drainage, foundation and road surface work on a £130m commercial development in Newbury, Berkshire, won by Mann in November.
Another major Mann job was a foundation, drainage and groundwork contract on the £52m redevelopment of Colchester Institute, awarded in February.
The firm also won a £40m concrete frame contract in November on a residential and commercial contract in London called The Bottle Store.
Mann was formed in 1996. In April it decided to apply for voluntary administration.
Director at construction credit reference agency Top Service, Lisa Cardus said: “It is not really a surprise to us that the firm went into administration as we have been tracking late payments at Mann Construction for the past two years.”
|Mann’s 10 biggest unsecured creditors||Amount Owed £000s|
|Keylines Builders Merchants||600.5|
|Wages Control Ltd||600.1|
|Raymond Brown Minerals and Recycling||168.1|