Non-preferential creditors of New Earth Solutions Group could receive a dividend of between 4-8 pence for every pound invested in the waste business, a report by administrators has suggested.
According to a progress report by joint administrators Duff & Phelps filed with Companies House this week (18 January), non-preferential creditors in New Earth are owed a total of £9.1 million – with claims received to date totalling £6.9 million.
An aerial view of New Earth’s Blaise Farm IVC facility. The firm’s assets have been sold to Panda.
The company’s principal lender the Cooperative Bank is set to recover around £35 million of £41 million owed by New Earth.
New Earth entered administration after talks with its senior lenders – Norddeutsche Landesbank Girozentrale and the Co-op Bank – broke down in summer 2016.
Funds associated with the company had been frozen since 2013 and small investors had complained to the Financial Ombudsman Service over advice they received in investing in the company (see letsrecycle.com story).
A report provided by Duff & Phelps notes: “It is estimated that non-preferential creditors are likely to receive a dividend of approximately 4p to 8p in the pound from the Prescribed Part. The final figure is dependent upon costs of dealing with the Prescribed Part and distribution thereof and the quantum of creditor claims.”
Co-op
On 9 June 2016, Co-op purchased all of Nord LB’s security against New Earth and became the sole senior lender. At the time Duff & Phelps was appointed, the Group was indebted to the Co-op Bank to the sum of £41.8 million.
The report adds that it is ‘anticipated that there will be insufficient realisations to repay Co-op in full under its security’.
Panda
The New Earth assets were purchased by DM Opco Ltd and sold on to Irish waste business Panda in the autumn. Five MBT and in-vessel composting sites in the UK continue to operate under the New Earth name.
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Source: letsrecycle.com Waste Managment
