Caledonian went down owing suppliers and clients £20m

Grant Prior 2 years ago

Offsite giant Caledonian Modular fell into administration owing more than £11m in now-worthless invoices to a host of subcontractors and suppliers.

A number of clients are also listed as unsecured creditors on top of the expected raft of trade creditors.

A statement of affairs by the administrator, seen by the Enquirer, lists major project clients as creditors owed cash following Caledonian’s collapse.

Student accommodation developer Studytel is listed as an ‘unsecured creditor – contingent liabilities’ with a debt of £4.8m on a £40m student scheme in Falmouth which was half finished when Caledonian went under.

Lewisham Homes has a potential £7.2m debt listed for two south London modular housing jobs and hospitality group edyn is owed up to £1.5m on a 20-storey aparthotel job in Canary Wharf.

The Department for Education is also listed as a creditor owed up to £2m. Caledonian had a place on the DfE’s £3bn modular framework.

Administrator Alvarez & Marsal took charge of the company in March.

It stated: “The company had been loss making, with recent underperformance impacted by material price increases and delays caused by the Covid-19 pandemic.

“The company had also suffered losses as a result of quality issues on legacy contracts which required ongoing remediation.

“Combined, these factors had a significant adverse impact on both margins and the Company’s liquidity position.”

Latest accounts provided to the administrators by Caledonian’s former management show an £11.1m loss in the last full financial year from a turnover of £64.5m.

Results for the final period from April 2021 to September 2021 show a loss of £10.7m from a turnover of £32.7m.

The company’s complex ownership was explained by the administrator who said: “Caledonian  is a wholly owned subsidiary of Trent Fabrications Limited, which itself is a wholly owned subsidiary of Caledonian Group Holdings Limited (the “Parent”), both companies are registered in England and Wales.

“MAK Capital Fund LP (“MAK”) is the majority shareholder of the Parent.”

American hedge fund MAK had supported Caledonian through its recent losses and was owed £25m when the administrators moved in.

Alvarez & Marsal oversaw a sale of Caledonian to the JRL Group shortly after their appointment for £6.25m.

The report said “assets excluded from the sale include stock, work in progress and debtors.”

One subcontractor said: “Yet again it’s us in the supply chain who suffer as we won’t see a penny for the millions of pounds worth of work carried out in good faith for Caledonian.”

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