Christopher Pole and Ryan Grant of Interpath Advisory were appointed joint administrators of Sirane Ltd on 15 July, five days after the business had filed a notice of intention to appoint administrators.
172 staff were made redundant, with a skeleton crew of 22 remaining at the Telford site to assist with the realisation of assets and the orderly wind-down of the company, which ceased to trade following Interpath Advisory’s appointment.
But two weeks later on 29 July, food packaging group Coppice Alupack stepped in to buy the assets, sales book and intellectual property of Telford-based Sirane and said it planned to rehire 70-80% of the company’s workforce.
Derek Nixon, CEO of the £500m-plus Coppice Alupack group – part of the EP Group of companies – told Printweek at the time that Coppice would put Sirane “back on the map”, with up to 130 workers rehired and trading under the Sirane brand.
The statement of administrator's proposal, filed in the last few days at Companies House, laid out the full story behind the events surrounding Sirane’s administration and the subsequent sale to Coppice Alupack.
The report stated: “The company suffered financial difficulties due to surging energy prices, inflating operational costs and supply chain restraints resulting in cash flow pressures.
“As a result, Interpath Limited (Interpath) were engaged jointly by the company and HSBC Bank […] in October 2023 to undertake a review of the company's cash flow. Interpath were later engaged to conduct weekly cash monitoring and reporting to the bank.
“As the cash monitoring identified an increasingly challenging liquidity position, Interpath were engaged on 3 June 2024 to conduct a review of the strategic options available to the company.
“This involved the launch of an Early Options process to explore investment, refinance and sale of business options for the company. As a result of the Early Options process, one offer was received for the business on a solvent basis, which was pursued.
“However, after a period of detailed due diligence, the party decided they no longer wished to proceed with the acquisition.
“As a result, it became evident that a solvent solution was not achievable, and the director resolved on 15 July 2024 to appoint us – Chris Pole and Ryan Grant – as joint administrators of the company.
“Following our appointment, we opted to wind down the business over a two-week period to provide us with time to sell finished goods stock and establish interest for the business and assets of the company.
“The administration received a large amount of news coverage which led to significant enquiries from interested parties in the business or assets or both.
“We worked with our agent, SIA Group Asset Ingenuity Limited (SIA), to manage the interest and to conduct site visits with interested parties, the majority of whom were interested in acquiring plant and machinery.
“However, following a site visit on 18 July 2024, Coppice Alupack Limited […] submitted an offer for the business and assets of the company. As all other offers received were only for assets on a piecemeal basis, Coppice's offer represented the best value for creditors.
“A sale of business and assets to Coppice was concluded on 29 July 2024 which involved the sale of all plant and machinery, remaining stock and intellectual property and facilitated the TUPE transfer of the remaining 21 employees to the purchaser.”
A Licence to Occupy (LTO) agreement was granted to Coppice for the three leasehold premises named Emerald, Pioneer, and Amethyst. The LTO enabled Coppice to continue to trade from the company's Emerald facility in Telford and provided it sufficient time to uplift the assets located at the Pioneer and Amethyst premises, according to the report.
Sirane generated revenue of £29.7m though it incurred an EBITDA loss of £3.9m in the year ended 21 December 2022. During the Covid-19 pandemic, the company's medical division initially benefited from an increase in sales volumes.
However, the loss of a large government contract in 2022 negatively impacted the business and resulted in liquidity constraints.
Sirane has two secured creditors; HSBC Invoice Finance (UK) Ltd (HIF) and HSBC. HIF provided the company with an invoice discounting facility and its indebtedness on appointment stood at £1.1m.
HIF has an assignment over the company's book debts which totalled £1.9m on appointment. It is expected that HIF will be repaid in full.
HSBC provided a Coronavirus Business Interruption Loan (CBILS) to the company totalling £1.2m in November 2020, which was intended to fund the acquisition of the trade and assets of an external business. This had total indebtedness of £580,000 on appointment, secured by fixed and floating charge security.
“Currently, we do not anticipate there will be sufficient funds to make any distribution to the bank,” the report stated.
Meanwhile, director and shareholder Simon Balderson had initially provided a cash injection of £200,000 in September 2022 to support cash flow. He provided a further £400,000 by April 2024. Neither of these amounts were recognised as shareholder loans in the company's accounts.
According to the report, the company’s estimated total deficiency as regards members was £2,502,116. Trade creditors were listed as being owed £1,699,587.
The administrators said it is uncertain whether there will be sufficient funds to make a distribution to ordinary and secondary preferential and that, based on current estimates, it is unlikely that there will be sufficient funds to enable a distribution to unsecured creditors from the administration estate.
Sirane became the first company in the UK to take delivery of HP’s Indigo 200k Digital Press last year. In the last couple of years it also launched a range of oven-friendly films and pouches printed with heat-resistant water-based inks and took on the first Bobst Vision CI flexo press in the UK.
