Creditors of Felixstowe’s Deben Transport face £6.77m shortfall
Unsecured creditors of Felixstowe-based container haulage company Deben Transport are unlikely to receive any of the £6.56million they are owed, it has emerged.
A report filed by the administrators reveals that the company’s bank, HSBC, which ranks as a secured creditor, is also likely to miss out on a sum of more than £212,000, leaving creditors facing a total shortfall of around £6.77million.
Deben Transport, based in Fagbury Road, Felixstowe, went into administration on April 13 with the loss of more than 200 jobs, after cost-cutting measures failed to stem mounting losses.
The company, formed in 1987, also operated from locations in Southampton, Alconbury, Tamworth, Manchester, Leeds and South Shields, as well as an additional site in Felixstower, in Parker Avenue,
It operated a fleet of 147 HGV tractor units and 351 trailers, mostly subject to hire purchase, lease or hire arrangements and had a total workforce of 224.
The report from joint administrators Mark Upton and David Scrivener, of Ensors Chartered Accountants, says Deben’s performance was adversely affected by its acquisition in April 2013 of Elite Transport Services which had gone into administration earlier that month.
You may also want to watch:
“Elite operated mainly in the north of the country and the aim of the acquisiion was to give the company access to more regional markets and to assit the company’s long term objective of becoming a nationally recognised brand with a diversified customer base,” says the administrators’ report.
“However, the integration of the new business had an adverse impact on the profitability of the business and for the year ended December 31, 2013 a loss of c£463k was reported.”
- 1 Body of man, 22, found in River Orwell
- 2 'Kind and loving' husband-to-be dies of lymphoma aged 27
- 3 Aldi targets Felixstowe, Saxmundham and Sudbury for new stores
- 4 WATCH: 'Selfish' drug-driver ploughs into police detective's vehicle
- 5 Pub near Stowmarket closes temporarily due to Covid-19 case
- 6 Former Town assistant Taylor back in football
- 7 265 new homes set to be built off A14 at Stowmarket
- 8 First look at £10m Sudbury garden centre revamp
- 9 Pair arrested for alleged sex assault on young woman
- 10 'I can't carry it' - Shock as plant starts growing eight inches a day
This worsened to a loss of around £923,000 for the year to December 31, 2014, despite cost-cutting measures including staff cuts, a reduction in remuneration for directors and reduced use of agency drivers.
Further measures included the closure of loss-making sites but continued pressure on cash resources left the company unable to keep up with payments due to HM Revenue & Customs.
Ensors was appointed to review the company’s prospects, with a view to proposing a “time to pay” arrangement with HMRC which had issued a demand for £435,000 and was threatening recovery action.
However, the review found that the company would not be in a position to settle its VAT liability for the March quarter, taking its total liabily to HMRC to around £825,000, including arrears, and that even if an arrangement could be reached with the taxman the company would require further investment.
Discussions with the company and its bankers reached the conclusion that new investment was not viable and that it should cease trading.
Taking into account the nominal £422,400 value of the company’s share capital, the total deficiency is £7.201m.
As there is unlikely to be any distribution to unsecured creditors, no initial creditors’ meeting is planned. The administrators are due to issue a further report in the autumn.