Failed Hewlett group owed £11.6m to trade creditors

Aaron Morby 11 years ago

Contractor Hewlett Group collapsed owing £11.6m to trade creditors and around £4.4m to its bank.

According to the administrator’s report into the firm’s failure in January, the management buy-out team bought the assets of Hewlett’s civil engineering and rail businesses for around £1.5m and its plant hire arm for £66,000.

The deal for the businesses, which were later renamed Hewlett Construction and Hewlett Plant, saved around 300 staff jobs.

This week bosses announced the Hewlett Construction had won its first major £12.5m infrastructure contract from Bela Partnership in Corby since being rescued from the administration.

But according to the report by administrator BDO a string of suppliers have been left out of pocket by the collapse of Hewlett Civil Engineering, which the previous management team blamed on the bank for failing to support its restructuring plan.

Among the major creditors are Burdens, which itself fell into administration, owed £292,000, hirer Gap Group hit for £331,000, ATG Access owed £226,000 and Jewson, which was left with £197,000 outstanding.

The administrators report said that Hewlett turnover peaked at around £70m in 2007 before it was hit by the sudden collapse in house building work caused by the credit crunch. The  following construction downturn and several major project delays saw it restructure its funding arrangements with the Bank of Scotland back in 2009.

By 2012 turnover had fallen to £42m and at the end of that year directors of Hewlett notified the bank of their intention to appoint administrators as part of a fresh restructuring plan.

But the bank was unhappy with the plan and called in their own administrator BDO seven days later.

BDO said the sale of assets had raised insufficient cash to pay trade creditors and Hewlett’s bank would also suffer a shortfall.

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