What is real cost of Haymills rescue deal?

Elliot Furniss

MANY Suffolk businesses are set to carry the cost of the rescue deal that saved Stowmarket construction firm Haymills from collapse.

The ailing Haymills Group was placed into administration last week before the majority of the businesses within the group were sold to Vinci Construction UK Ltd, part of Vinci, an industry giant based in France.

The buyout included the business assets of the group's Property Solutions and East Anglian Projects businesses, which saved the jobs of more than 430 of the group's 700 employees.

However, the purchase of the businesses did not include any of the Haymills Group's debts, save for taking on the debts associated with employee contracts.

This arrangement left unsecured creditors - including sub-contractors - to lodge individual claims with the administrators.

One local businessman still owed tens of thousands of pounds for work completed for Haymills has criticised the deal and the Government for allowing it to be agreed.

He said: “How can they be allowed to go into receivership and let all the other companies suffer? I think it's disgusting - I feel we've been shafted.

“I will never work for Haymills again - they owe so much money and people are not going to get paid. What does that say about our Government?

“(Lord) Mandelson (First Secretary of State and Business Secretary) is on TV talking about supporting companies but they couldn't help a local firm, and by doing nothing it has hit all the sub-contractors.”

The businessman, who asked not to be named, said he was still dealing with the same management staff at Haymills from before the takeover but was getting nowhere with his claims.

Stephen Oldfield, joint administrator and partner at PricewaterhouseCoopers LLP, which oversaw the deal, said it was likely that there would be “surplus funds” available to unsecured creditors, but the extent of any dividend would be completely dependant on the claims lodged by creditors.

He said: “Although significant funds have been released from the sale of the business, there remains the contracts being dealt with by the London division to sort out and creditors' claims to ascertain.

“There are likely to be substantial claims from insurers and a large claim, as yet unquantified, from the group's Gibraltar business, due to a guarantee on a large contract over there.

“The administrator will be examining the claim from Gibraltar in some detail as it is likely to be the largest single claim in the administration and will therefore significantly affect the creditors.”

He said all creditors would be written to over the next few days, explaining the position for them and the process of the administration.

A creditors' meeting will be called in the next eight weeks and Mr Oldfield said that during the meeting the outcome for creditors would become “clearer”.

A spokesman for the Government's Department for Business, Innovation and Skills said banks still needed to make “commercial decisions” and could not prop up every business.