Full cost of Haymills collapse revealed

THE full scale of the financial collapse of Haymills, one of the region's biggest construction firms, can be revealed today.

Elliot Furniss

THE full scale of the financial collapse of Haymills, one of the region's biggest construction firms, can be revealed today.

Much of the Haymills Group, which went into administration in September with debts of about �28million, is now owned by French industry giants Vinci, including the Stowmarket-based East Anglian arm of the business.

But hundreds of creditors - ranging from small family run operations to well-established national suppliers - are set to receive “only a very small dividend” as a result of the takeover deal, which was overseen by PricewaterhouseCoopers.

Documents obtained by this newspaper show that at the point of its collapse Haymills:

nHad outstanding debts to more than 800 creditors - nearly 200 of which were from Suffolk and north Essex

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nFaced claims from creditors ranging from just a few pence to more than �600,000

nAlso owed the Inland Revenue �469,891 and had inter-company debts of more than �1million

nHad a total debt to creditors of an estimated �27,920,000

The ailing Haymills Group was placed into administration in August before the majority of the businesses within the group were sold to Vinci Construction UK Ltd, part of Vinci, an industry giant based in France.

The buyout included the business assets of the group's Property Solutions and East Anglian Projects businesses, which saved the jobs of more than 430 of the group's employees.

However, the purchase of the businesses did not include any of the Haymills Group's debts, save for taking on the debts associated with employee contracts.

This arrangement left unsecured creditors - including sub-contractors - to lodge individual claims with the administrators.

The largest debt on the Haymills books at the point of the takeover was �672,277.10 and there were more than 28 claims worth �100,000 or more.

A further 48 companies are owed between �50,000 and �100,000 - including several from Suffolk and Essex.

However, many of the companies that this newspaper managed to speak to said they were actually owed a considerably larger sum than quoted in the documents, including unpaid “retentions” - payment temporarily withheld for completed work that was never handed over - as well as cash for uncompleted jobs.

The company's debts include more than �6million in “accruals” - outstanding debts that have yet to be invoiced - and there is a shortfall of �1,592,000 in the pension scheme.

Stephen Oldfield, of PwC, said that because of the size of the claims made it was likely that creditors would only receive a very small dividend - and that could take many months to materialise.

He said there were also “very big claims” elsewhere in the group and the fact that the London and South operation did not sell meant there was less money available.

He added: “Of course the outcome for creditors is very disappointing. The claims against the company are very considerable. It's very difficult. From the employees' perspective it's good news - (but) for the sub-contractors it's not such good news.”

The first of two creditors' meetings was held in London this week, a second will take place in Norwich next week.