WaverleyTBS, the drinks wholesale business, incurred losses after exceptional items of £2.5m on sales of £195.4m in the eight months to August prior to the business being placed in administration in October.
A new report from its administrator Deloitte also says that the business incurred further losses in September 2012 “and these losses were expected to continue in the short term”. “At the same time, a number of key suppliers reduced credit terms leading to working capital problems.” The losses included an exceptional items charge of £1.3m in relation to restructuring costs.
The report says 19 parties were provided with Information Memorandum detailing the business and assets as Deloitte looked for a buyer. Two offers were made, one for the whole company and the other for a substantial part of it.
“By late in the evening of 5 October the party offering for the whole of the business withdrew unexpectedly, citing a potential TUPE liability and the expense and difficulty of integration of IT systems as reasons for withdrawing its offer.
“The second interested party, offering for substantially all of the business, continued due diligence until 8 October when it also withdrew its offer again citing similar reasons for not progressing with a transaction.”
According to Deloitte, it received 143 retention of title claims from drinks and other suppliers for stock held by the company as of 5 November, and said it is “possible more will be received”.
“The administrators prioritised the return of short shelf life stocks to mitigate potential loss to creditors and this process is largely complete.
“We are now in the process of returning longer dated stock. The return of stock process is likely to take a number of weeks before it will be completed.”
The report says that at the date of Deloitte’s appointment, Waverley held stocks with a book value of c£13m, £3m of which was sold during the administrator’s trading period between 5 and 8 October.
Deloitte said that stock sales are also being pursued via a number of private treaty transactions. On 7 November an agreement was completed to sell the intellectual property rights to Waverley for a consideration of £1.05m.
Deloitte has instructed Winterhill Largo to perform a valuation of its freehold property in Gateshead, one of its main trading sites, and to market it for sale. It has a book value of £1.7m as of December 2011.
An earlier report from Deloitte showed that Waverley collapsed leaving £64.5m in debts to unsecured creditors. Diageo GB was the firm owed the single biggest amount - £6.1m - followed by Heineken UK (£4.3m), AB InBev (£3.5m) and Bacardi Brown-Forman Brands (£2.9m). In total £40.5m was owed to 196 trade creditors, the majority of which were drinks companies.
Waverley was owed £26.5m by trade debtors at the time of its collapse, of which it is estimated that only £15m will be paid.
