Attempts to recover an anticipated £8.6m from Pochin’s land and property assets has so far yielded only £1.8m as the administrator tries to sell remaining sites in a subdued market before the administration period ends in August.
The administrator, Grant Thornton, has raised the money from the sale of six assets belonging to the Cheshire-based form with a further 14 yet to be sold.
Agent Northwood advised on the sale of three residential properties on Brooks Lane, Middlewich for a total of £250,000 while additional assets in Anglesey and Stoke-on-Trent were disposed for £1.1m in total.
The land in Stoke was bought for £406,000 by former Pochin’s directors Jim and Bob Nicholson, while The Precinct in Angelsey was sold for £710,000. Both assets were marketed by Christopher Dee.
Additionally, Shotton Works, a 13.5-acre industrial complex in Deeside was sold at auction for £311,000 having been marketed by Avison Young.
The administrator predicted the realisation of £8.6m from land and property and has listed a further 14 assets which are yet to be sold including Emperor Court on Crewe Business Park, which is listed as under offer, and Pochin’s head office in Brooks Lane, a deal for which is said by Grant Thornton to be close to completion.
Avison Young, Northwood, Christopher Dee and Legat Owen have been instructed to sell these remaining sites.
With many deals in the market now being halted due to the coronavirus pandemic it is unclear whether the Pochin assets will be sold within the window of administration which closes in August. Grant Thornton could ask the court to extend the administration period.
Jason Bell, administrator at Grant Thornton said: ”Final property realisations remain uncertain, particularly following the impact of Covid-19, which has impacted progression of a number of property disposals.”
Grant Thornton said that payment to unsecured creditors, owed £70m, was “uncertain” in its most recent update and that any dividend owed to unsecured creditors would be paid in liquidation.
In the first administrator’s report, published in October 2019, it was estimated that the dividend to be paid to unsecured creditors was likely to be in the order of 4p in the pound.
This ratio is not mentioned in the most recent report which states “the dividend to unsecured creditors is currently uncertain pending the realisation of remaining assets.”
However, 96 employees owed a total of £135,000 will be paid in full as will NatWest Bank which is owed £8.6m, of which £6.6m has been paid through the sale of land and property assets and from other companies within the group.
Statutory investigations into Pochin’s affairs are ongoing with additional administrator BDO appointed in November 2019 to carry out this work.
Pochin’s demise was largely down to the problems of its construction arm and four problematic residential jobs which led to estimated losses of around £17m across Pochin Construction.
As a result, the company was ultimately unable to continue trading leaving many contractors significantly out of pocket.
Legal claims relating to certain contracts, some of which started before the appointment of administrators in July 2019, are ongoing.
Firms owed six figures by the collapsed contractor include:
- Stoke-based Carter Electrical Services, owed £740,000
- CS Civils & Groundwork, in Leigh, owed £373,000
- Salford-based Quartzelec, owed £328,500
- Liverpool M&E contractor Laycock Mechanical Services, owed £236,000
- Blackpool-based JMC Mechanical & Electrical, owed £182,200
- Walker Modular, owed £143,000
- M&E contractor HE Simm, based in Liverpool and owed £114,000
Pochin’s Construction is owed £13.5m by debtors and through retentions of which £750,000 is expected to be recovered. This is down from an initial estimate of £950,000 outlined in the first administrator’s report.
The £13.5m owed by debtors is spread across 34 contracts, seven of which, worth £5,8m, were live when the administrator was appointed. The company is also owed £13.1m by other companies in the group but “recoverability will not be established until the finalisations of other administrations within the group,” according to the administrators.
In terms of realised assets, there were plant, machinery, fixtures and fittings sold at auction by Hilco for £260,000 while some IT equipment, which had been retained by staff when they were made redundant, was also returned. Some remains outstanding.
Grant Thornton’s fees to date are more than £660,000 and secondary administrator BDO’s £105,000, although fees have yet to be paid.