Celloglas director Richard Pinkney and commercial director of its Mirri operation Ian Fergusson, as well as outside investor Dara Changizi, a director at Glasgow-based packaging post-press specialist ACA, stepped in to acquire Celloglas’ business and assets last month.

Printweek reported that the eventual acquisition was made via newco Celloglas Holdings Ltd.

According to documents now filed at Companies House, the trio all became stakeholders of the newco alongside Multi Coat Print Finishers Ltd, a Bristol-based firm that holds 102 of the 200 ordinary shares (51%) in the company, with Changizi holding 52 and Pinkney and Fergusson each holding 23.

Jamjar Print Ltd owns 75% or more of the shares of Multi Coat Print Finishers Ltd and is therefore a “person with significant control” of that company according to Companies House.

Pinkney told Printweek that Multi Coat Print Finishers Ltd is an outside investor that won’t be involved in the day-to-day running of the ‘new’ business.

Celloglas had previously filed a Notice of Intention to Appoint Administrators at the end of April as a prelude to the deal, after its business and assets were put up for sale earlier that month.

Administrators James Hawksworth and Deviesh Raikundalia at RSM UK Restructuring laid out their account of the events in the statement of administrator’s proposal, filed at Companies House.

It started with a recap of the issues that led to the company’s troubles, including problems caused by the Covid pandemic, which caused a 30% reduction in turnover, to £8m, and losses of £0.3m in 2020, with only a gradual recovery in 2021 and 2022, during which turnover of £10m and £9.8m, respectively, was recorded.

The document also summarised other struggles around Covid-related loans and claims, and noted that the company’s recent financial distress was further compounded in late 2022 when its fixed-rate utility supplies came to an end and resulted in an increase of around 300% to utility costs.

Meanwhile, an HSE fine of £105,000 issued in late 2022 and payable in 2025, relating to an accident in 2020, was a material post-balance sheet event that caused a delay in the filing of the FY22 accounts – which remain unfiled.

The report further stated that during the first quarter of 2024, the company also accrued significant arrears of around £200,000 with its energy supplier, who commenced enforcement action to obtain a warrant for entry and disconnection for all three sites.

An informal payment arrangement was proposed by the company and, whilst not formally agreed by the creditor, was adhered to by the company, reducing arrears to around £150,000 as of March 2024.

The company was entitled to apply for a hearing in relation to the warrant application. Having made such a request to the creditor on 3 April 2024, the creditor advised given the ongoing payments being made in relation to arrears, that it would be ceasing enforcement action.

Additionally, HMRC arrears of around £0.8m were subject to three Time to Pay arrangements. The report said the company had “latterly failed to maintain payments under the TTP arrangements and HMRC liabilities are now estimated at £1.1m”.

In the absence of any solution to its immediate working capital need, the directors took steps to instruct RSM UK Restructuring in April 2024 to undertake an accelerated mergers and acquisitions process with a view to concluding any transaction via a pre-pack sale.

The report then outlined the specifics of the marketing process and valuation of the company’s assets, supported by Lambert Smith Hampton, which saw 54 parties request NDAs, of which 40 were returned and resulted in six offers being received for either part or all of the business.

The business and assets were valued on both in-situ and ex-situ bases. This provided the administrators with a benchmark against which offers could be compared. In-situ assets were valued at just over £1.2m with ex-situ assets valued at just over £396,000. The latter did not include the materials costs to facilitate a sale, which was estimated by Lambert Smith Hampton as around £200,000.

Four offers were received for the majority or all of the business and assets which were considered potentially capable of completion. Two further offers received for part of the business were not considered viable for various reasons.

Offer 1 excluded the Leicester site, while the party behind Offer 2 would not provide a deposit for an exclusivity agreement, which gave rise to additional risk the transaction would not progress in comparison to alternative offers. Additionally, the party was not prepared to pay a non-refundable deposit.

Offer 3’s consideration was significantly less than alternative offers, and therefore this offer was not pursued further.

Offer 4, which was ultimately successful, was made up of £633,014 for all of the business and assets. The consideration would be paid with an initial payment of £350,000 payable at completion of the sale, and a further deferred amount of either 10 months of £19,700 (£197,000 total) or 18 months of £15,723 (£283,014 total). No conditions were identified, however the offer agreed to a £50,000 deposit for exclusivity.

While the offer was received from a third-party, the two company directors – Fergusson and Pinkney – were to be part of the purchase.

“This offer allowed for the greatest return to creditors, after considering costs” and secured around 74 jobs under a TUPE transfer. Ultimately this offer was pursued and accepted.

The business and assets of Celloglas Ltd were sold on 13 May 2024 to two special purpose vehicles. The business and assets of the Leicester site were sold to Celloglas Leicester Ltd while the business and assets of the Reading and Leeds sites were sold to Celloglas Mirri Ltd.

The report confirmed: “Consideration is being part paid on a deferred basis, with the sum of £350,000 having been received on completion, and further payments are due of £283,014 in 18 monthly payments of £15,723. A parental guarantee covering the deferred element of the sale consideration has been provided by JamJar Print Limited.”

According to the report, the company’s estimated total deficiency as regards members was £2,304,128. Among the unsecured creditors, “trade and expense creditors” were listed as being owed £1,588,907.