Beta Distribution, which went under in October, did its best to try and find a buyer to stave off insolvency, according to the administrator’s report.
The outfit contacted 19 potential buyers but could not find any acceptable offer. Beta crashed leaving £36 million to creditors.
It is unlikely creditors will receive any of the money owed, secured creditors will not be paid in full, and there will be “insufficient” funds to pay preferential creditors, including Beta employees, the report said.
The report, filed by Deloitte said the companies’ financial position and “the quantum of the funding required were cited by interested parties as the principal reasons for withdrawing from the process.”
The business crashed because of the failure to fix a £14 million cash loss through foreign exchange currency contracts entered into in 2016.
An overstatement of stock to the tune of £10 million was also blamed for the company’s financial distress.
Beta reported a turnover of £186 million for the year to 31 March 2017.
“Key suppliers reduced the companies’ credit terms following the withdrawal of credit insurance due to declining trading and cashflow”, the report stated.
Deloitte was brought in to assess Beta’s finances by Lloyds Bank, a secured creditor when the distributor breached its bank overdraft.
Some £7.4m of book debt has been realised since the appointment of the administrator, with sales of stock bringing in £100,000.
The company’s Belgian arm, Beta Distribution BV, is not subject to any insolvency process and continues to trade.
