Deal for turkey giant Bernard Matthews leaves East Anglian firms out of pocket

Bernard Mathews at Holton Halesworth airfield (Image: ©)

The turkey giant was acquired by the Boparan Private Office, an investment firm owned by 2 Sisters Food Group entrepreneur Ranjit Boparan, in a pre-pack administration last month.

List of vendors and how much they are owed

The deal, which transfers a company’s assets, but not its debts, saved the jobs of the 1,800-strong workforce, but left hundreds of suppliers out of pocket all over the country, with several in East Anglia owed six-figure sums.

The total bill racks up to £23million owed to more than 900 firms, according to a creditor’s list issued yesterday. Of these, there are 63 businesses in Suffolk and Essex which are owed a total of £1,061,653.

For some – small and mid-sized firms – the loss of the money will be crucial.

A letter sent to creditors by administrators Deloitte confirms that there will be “no funds available to make a distribution to the unsecured creditors” and so no creditors’ meeting will be convened to discuss the situation. The only exception will be £600,000 made available under the “prescribed part”, a ring-fenced fund which must be made available to unsecured creditors in administration cases.

Among the creditors is agricultural purchasing group Anglia Farmers (AF), which is owed more than £10,000. AF chief executive Clarke Willis said while that was not a large amount in the context of the company’s £250m turnover, he feared for the financial future of smaller companies affected.

He said: “All of a sudden, this has sucked millions out of our local economy. It has just disappeared.

“To a certain extent, a firm like Tesco can stand being owed £1m, just like we can stand our £10,000-odd. But there are some smaller companies and sole traders where £5,000 would be a really big deal.

“Normally in the administration process, the assets would be sold and there would be a payout of some of the funds, even if it was 5p or 10p in the pound. But because of the way this package deal was dealt with, there is nothing.”

A statement from Deloitte says the pre-pack transaction was “the best possible outcome” after Bernard Matthews had racked up crushing debts and financial losses. It says the only viable alternative options to sell or wind-down the company would have required working capital which was not available, or resulted in 1,800 redundancies.

A spokesman for Boparan Private Office said the deal was the only way to safeguard jobs. He said: “We are just two weeks into acquiring Bernard Matthews and there is a great deal of work going on at the moment to stabilise the business and deliver Christmas. We are continuing to work closely with all stakeholders, including the administrator.”

Previous owners Rutland Partners declined to comment.

For the full Bernard Matthews creditor list, see www.eadt.co.uk

Are you one of the creditors affected by the Bernard Matthews sale? Contact newsroom@archant.co.uk

Variety of creditors

Bernard Matthews’ creditors include suppliers of agricultural products, financial advice, storage equipment, hauliers, training and safety, plumbing, data systems, packing and marketing firms.

The largest debts are for Tesco Stores and Annyalla Chicks – both with estimated bills of more than £1m.

A number of East Anglian firms contacted by the EADT declined to comment as they were hoping to work with the new owners in the future and did not want to jeopardise new contracts.

The owner of one Suffolk business, owed a five-figure sum, said he was “gutted”.

“It’s hit us hard,” he added. “My first thoughts were ‘how am I going to pay my mortgage, how am I going to pay my staff’s wages, how are we going to survive?’

“I was very angry two or three weeks ago.

“But now you just shrug your shoulders, pull up your trousers and get on with it.”

Another Suffolk managing director, also owed a five-figure sum, said: “It’s very unfortunate. Many of us were on the understanding that they would look after us and they would pay us money just to keep us on board and continue to service them.

“So when that came out, it was very disappointing. You feel a little bit let down. It’s hurt a lot of companies, but these things happen. You work evenings and weekends and it’s all been for nothing.”

The owner of another Suffolk business, said: “We are going to take a big hit but I think everyone who was dealing with them knew that was going to happen anyway. A lot of people who were dealing with them could not find anyone else to take their products, because they were such a large client.”

Locations of firms owed money include Ipswich, Bury St Edmunds, Lowestoft, Eye, Woodbridge, Halesworth, Sudbury, Newmarket, Colchester, Halstead, Braintree, and Chelmsford.

Included in the list were Waveney District Council, said to be owed £124,935, Broadland District Council £238,772, and Essex and Suffolk Water £6,245.