UBB Waste (Essex) Ltd – formed by Urbaser and Balfour Beatty – warned in its financial accounts for the 2019 calendar year that it could be hit with more than £35 million in costs in a “worst case scenario” after its legal battle with Essex county council.
The MBT facility in Basildon at the centre of the dispute
Published on 29 September 2020, the accounts show the company, which entered into administration in August, made a loss of £2.4 million in 2019.
In June 2020, Essex county council won its complex legal case against UBB Waste (Essex), (see letsrecycle.com story).
The local authority was awarded damages of £9,038,428 to the end of February 2019 and continuing losses thereafter at £99,563 per month. The judge also declared that the county council was entitled to terminate the contract as at 13 June 2019.
UBB Waste (Essex) was awarded £745,234 in damages in relation to a claim regarding asbestos.
Accounts for UBB Waste (Essex) also show that it appointed administrators, FRP Advisory Trading Ltd, on 12th August. FRP have declined to comment.
Financials
The financial accounts for the year begin by explaining the court case, and list the best and worst case scenarios.
The best case scenario would see the company winning the court battle and the facility would continue to go ahead, and it would be entitled to compensation for legal costs and profits not generated.
In the worst case scenario, the accounts explain that if the case is lost, “it is not possible to rule out the risk that following the litigation, the project is liquidated and the assets are not recovered”.
It continues: “The assets recognised in the year end 31 December 2019 are £172,630,000. If the company is liquidated and no compensation is received in the litigation or otherwise, the maximum losses for UBB Waste Essex LTD are equivalent to the subordinate debt balance (£36,570,000).
“Assuming a worst-case scenario for compensation upon termination of the contract, the company will not have the funds to repay the subordinated debt”
“Assuming a worst-case scenario for compensation upon termination of the contract, the company will not have the funds to repay the subordinated debt and its shareholders would not be repaid for the loan provided or any interest tied to it. At 31 December 2019, the balance of the subordinated debt is 37 million. This is split between Urbaser investment LTD (70%) and Balfour Beatty Investment Holding ltd (30%)”
Report
In a director’s report looking at factors which could influence the company in the coming year, the report explained that if the dispute is not solved, it will “cast significant doubt over the future of the company’s ability to continue as a going concern such that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
“Should this contract cease, the company would be liquidated,” the report said.
Tovi Eco Park
UBB Waste (Essex) was named as the preferred bidder in 2012 to build a 417,000 tonnes per year capacity MBT facility in Essex, named Tovi Eco-Park
The plant was built under a 25 year contract (see letsrecycle.com story), and was said to be worth £800 million over its lifetime.
In December 2019, Essex county council announced a contract to send 200,000 tonnes of waste to landfill (see letsrecycle.com story).
The post UBB Waste Essex predicts £35m hit from MBT case appeared first on letsrecycle.com.
Source: letsrecycle.com Waste Managment
