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BRITISH Seafood creditors meet tomorrow (Tues) with the depressing news that the company owes more than a dozen banks around £253-million, some of that debt unsecured.
The meeting is due to take place at the Chartered Insurance Institute in London amid growing concerns about the company's behaviour prior to going into administration in February this year.
The Administrators Deloitte have told the creditors in a written report that those concerns began to surface soon after the start of 2009 - some 16 months ago - when the group breached the borrowing requirements with its main lender The Bank of Scotland. This was eventually rectified and a refinancing plan was agreed the chief executive Mark Holyoake and the finance director David Wells.
The administrators report says that in September last year the group again breached its borrowing requirements by failing to pay maturing trade credit lines - a breach not rectified this time. In November Deloitte was engaged to carry out a review of British Seafood's financial position, but despite several attempts to contact both directors only limited information was provided.Later Deloitte claimed it was refused access to the group's premises and its staff.
Deloitte says it continued to request information into this year and to arrange meetings with the staff and directors, but again these requests "were unsatisfactorily answered".
Deloitte did eventually secure access in accordance with their rights under finance documentation, but by mid February it became clear that the financial information Deloitte was seeking and payment towards arrears was not going to be made. Subsequently,an application was made to the High Court and the group was placed into administration.
Deloitte said. "Our investigations into the financial dealings of the group are ongoing, and the administrators have already taken certain actions to seek to protect the companies' interests in this regard." So far there has been no comment from Mr Holyoake or any other member of the board.
Last week Deloitte successfully sold one major subsidiary, Five Star Fish of Grimsby, for a figure thought to be between £30-million and £35-million, and a couple of small operations, including seafood business in the Midlands, have found a buyer. The Serious Fraud Office has refused to comment on reports that it is investigating British Seafood.
Should fisheries be closed during breeding time to allow stocks to reach more sustainable levels?
