Collapsed city firm owed creditors £21m

Richard Irvin Energy Solutions is based in Aberdeen
Richard Irvin Energy Solutions is based in Aberdeen

Richard Irvin and Sons owed more than £21 million when it crashed into administration in December, with the loss of 109 jobs.

The scale of debt at the Aberdeen-based group, whose activities included facilities management (FM) and mechanical and electrical (M&E) services for north and north-east customers, is laid bare in papers lodged at Companies House.

Administrators at EY said Richard Irvin owed about £3.7m to the Bank of Scotland, including an overdraft of around £2.5m and a term loan worth about £1.2m.

The firm’s own purchase ledger suggests claims from ordinary creditors will be in the region of £17.4m.

A last-minute “pre-pack” deal was brokered to save 337 jobs at the firm as it collapsed, with private-equity firm Rcapital Partners snapping up the FM business and assets via an investment vehicle for £1.1m.

Pre-packs involve the sale of a struggling business being negotiated prior to administration.

They are completed by administrators soon after being appointed.

EY said it had received nine approaches for a pre-packaged sale of all or parts of Richard Irvin’s business and assets.
Richard Irvin’s finance director, George Still and FM managing director, Mark Buchan, ended up with minority stakes in Rcapital investment vehicle Richard Irvin FM.

But in its notice of administrator’s proposals, EY said this did not amount to a sale to a “connected party”.

It added: “As far as we are aware, George Still and/or Mark Buchan had no connection with Rcapital Partners LLP or the purchaser prior to this transaction.”

A long list of ordinary creditors of the collapsed firm reveals the financial impact on its suppliers.

Plumbing and heating products firm Wolseley was left with a near-£300,000 loss, while its Aberdeen-based William Wilson subsidiary was owed almost £31,000.

Other major creditors include BSS Group, RJC Mechanical, Plumbing Trade Supplies, ADT Fire and Security Services, Edmundson Electrical and Hamworthy Heating, which were all owed more than £100,000.

Local suppliers stung include security services and fire and gas detection specialist Oteac, owed nearly £122,000.

Spelling out the reasons for Richard Irvin’s demise, joint administrators Colin Dempster and Fiona Livingstone said: “Difficult trading conditions, together with increased political and economic uncertainty, resulted in declining margins in respect of the company’s contracts.

“FM benefited from recurring contracts, which were geographically diverse and generally more profitable, however, a number of M&E contracts were completing, which led to delays in receipts.”

EY’s document also shows Bank of Scotland twice extended its overdraft, by a total of £1m, before Richard Irvin finally collapsed on December 19.

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