Dunne collapsed owing £30m to trade creditors

Dunne’s main concrete frame operation collapsed owing more than £30m to both trade contractors and associated companies.

Also it has emerged that Keltbray paid £8.5m for Dunne’s Bathgate head office and plant in a deal concluded four weeks after the firm collapsed laying off 574 staff.

Insolvency specialist FRP Advisory detailed the level of debt across all six businesses placed in administration in a report to creditors.

At the two key businesses – Dunne Building and Civil Engineering and CLR Plant Hire – trade creditors and suppliers are nearly £15m out of pocket.

Dunne Building and Civil Engineering owes a further £13.8m to associated group companies.

Property and plant held by the two companies and parent group were secured from administrators by Keltbray nearly four weeks later.

This deal prompted the demolition contractor to set up a concrete frame business with Gordon Dunne, taking a 20% stake and the role of managing director.

Keltbray deal

• £3m for property at Bathgate, owned by Dunne Developments (Prior book value £4.45m)
• £1.45m for CLR plant  (book value £1.7m)
• £3.9m Dunne Building and Civil Engineering plant (book value £11.6m)

The administrator’s report reveals that turnover at the main concrete frame business rocketed in the last four years from £37m in 2013 to £94m forecasted for this year.

But the firm ran into cash flow problems after taking a £4.5m hit in 2015 on two loss-making contracts .

Cash flow pressure came to a head early in 2016. Dunne biggest main contractor client Multiplex was then persuaded to release £5m in accelerated payments to keep the firm going on its jobs.

But postponement of ongoing work of one of Dunne’s Multiplex contracts tipped the firm into a crisis in June, forcing the director to seek significant extra facilities with Dunne’ bank Santander.

But talks ended in deadlock forcing the directors to request the bank call in administrators on 19 July.

Key creditors Dunne Building and Civil Engineering

Associated Dunne Group creditors

• CLR plant hire: £7.8m
• Dunne Concrete Flooring: £100,000
• The Dunne Group: £3.56m
• Dunne (BCE): £2.33m

Unsecured trade creditors

• Express Reinforcements: £2.67m
• Tarmac Trading: £1.2m
• Peri: £668,000
• McGill & Co: £338,000 – contractor
• Sterling Lloyd Construction: £312,000
• FES Support Services: £271,000
• Evencast (Kent): £244,000
• LBC UK: £206,000 – contractor
• Ischebeck Titan: £203,000
• Taylor Maxwell: £160,000
• Wolsley: £136,000
• C J O’Shea Plant Hire: £133,000
• Doka UK Formwork: £119,000
• Hanson Quarry Products: £117,000
• M&S Engineering: £112,000
• Cemex UK: £110,000

from Construction Enquirer http://www.constructionenquirer.com/2016/09/19/dunne-collapsed-owing-30m-to-trade-creditors/

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