The latest report filed by administrators at PricewaterhouseCoopers (PwC) details the position for creditors of ‘new’ Polestar UK Print and Polestar Stones-Wheatons (formerly Prospect Bidco and Prospect Bidco 2, the special purpose vehicles used to acquire Polestar in a pre-pack sale in March).
Polestar UK Print and Polestar Stones-Wheatons went into administration just a month after the sale.
PwC said a number of factors had contributed to the failure of “new Polestar” including: supplier ransom payments that were higher than anticipated, a higher level of pro-forma payments than had been envisaged, and slower debtor payments than forecast.
The subsequent loss of three major contracts tipped the business over the edge.
Secured creditors Proventus Capital Partners and Barclays Bank, owed £65m and £25m respectively, are likely to receive between 15%-25% of the amount owed.
Unsecured creditors of Polestar UK Print, owed almost £33m, including trade creditors amounting to £11.4m, are expected to receive less than 2% of their debt as they will be paid from a ‘prescribed part’ fund of £600,000.
At the time of writing it was not clear why some creditors, including Flint Group (£2.7m) and UPM (£4m), are shown as being owed multimillion-pound sums for such a short period of trading.
Unsecured creditors of Polestar Stones-Wheatons, owed circa £900,000, will receive nothing.
Former Polestar employees owed around £600,000 for unpaid wages and holiday pay will be paid in full.
PwC sold Polestar Chantry’s business and assets to YM Group for £2m (including £750,000 for some equipment from Sheffield), the Bicester assets were sold to Wyndeham Group owner Walstead Investments for £5.1m, and the business and assets of Polestar Stones-Wheatons were sold to an MBO team for £350,000.
Polestar Applied Solutions in Nottingham, which is not part of the administration but has common shareholders, remains up for sale. Funds of £800,000, along with its debtors and assets, have been transferred to the business via an interest-free, unsecured inter-company loan from Polestar UK Print of £3.6m.
This is repayable upon the sale of the business, which PwC said it hoped to achieve in “the near future”.
Adare has been tipped as a possible buyer for Applied Solutions. The group declined to comment.
PwC joint administrators Zelf Hussain and Peter Dickens said that the decision to keep trading the Polestar sites in administration until the middle of June, which resulted in trading losses of just over £3m, had despite that helped to secure a better outcome for creditors through going concern sales.
It also maximised debtor book collections, PwC said, which had brought in £10.7m of circa £16m so far.
The administration is complicated by a number of factors, including the fact that Polestar had intended to hive over the assets of Stones and Wheatons into Polestar Stones-Wheatons prior to the administration.
“It appears the transfer of assets was not executed prior to our appointment as administrators and we are currently of the view that all assets in relation to the Exeter and Banbury based businesses remain assets of New Polestar UK Print Limited. All proceeds and related costs from realisations from Banbury and Exeter related assets will therefore be recognised in New PUPL. We also envisage assessing all creditor claims in the estate of New PUPL,” PwC stated.
PwC is also seeking creditor approval for the payment of £30,692 in time costs for work carried out for Polestar immediately prior to the administration, and for a £10,000 legal bill from DLA Piper for the same period.
“PwC and DLA’s work in preparing and planning for the administrator’s appointment made a significant contribution to achieving the purpose of the administrations as it facilitated the continuation of trade and meant we could quickly take control of the business by mobilising a fully briefed team,” PwC said.
