UK: Taxpayers face £50m hit from collapse of Comet
09:40 17 December 2012
THE collapse of electricals retailer Comet has left the taxpayer facing a £50million hit, a report from its administrator is expected to show today.
As the remaining Comet stores prepare to close for good, the report from Deloitte is likely to indicate that insufficient funds have been raised from the winding down of the chain to pay up to £24m in redundancy payments to 6,000 staff. This means the Government will probably have to step in and ensure workers receive their payments.
The statement expected to be published today will also disclose that unsecured creditors, including HM Revenue & Customs, which is owed £26.1m, will receive nothing.
Secured creditors, such as the backers of Comet’s parent company, Hailey Acquisitions, will get payments of just under £50m, although this represents a shortfall of £95m on the amount owed at the time of the collapse of the 236 store chain in early November. Comet’s store network included branches in Bury St Edmunds, which was included by the administrators in an early round of closures, Ipswich and Colchester.
The scale of the problems at Comet will also be highlighted in the report, with the chain reportedly racking up losses of £95m in the year to April, followed by a further £31m in the subsequent five months as credit insurers lost confidence and withdrew support for the business.
Hailey was the investment vehicle put together by Henry Jackson of OpCapita, who raised the funding from unnamed investors for Comet’s takeover from French retail group Darty.
Deloitte has said the last 50 stores will close for the final time tomorrow, amid speculation that the brand will be sold to an online retailer and around 20 shops picked up by rivals.
The unsecured creditors are also understood to include ITV and Google, which are owed £1.2m and £602,000 respectively for unpaid advertising bills, while holders of £4.7m of unclaimed Comet gift cards and vouchers are also on the list.
However, an estimated £40m of payments will be made to suppliers and £2.1m of holiday and back pay owed to staff will be paid in full.