The latest report from administrators James Saunders of KR8 Advisory and Gareth Wilcox of Opus Restructuring details how TJ Books directors Andy Watts and Andy Adams had requested additional funding of £1.2m to support the Charlesworth buy, but instead a cash flow loan of £400,000 was granted.
This left the remaining costs from the transaction to be funded from TJ’s existing working capital facilities, and delays to the deal also resulted in operational disruption with a number of key customers taking their work elsewhere.
With no money available to trade the company in administration, a fast-track pre-pack sale process was launched at the beginning of February.
Six interested parties signed NDAs, and two offers were made, but one of the offers was subsequently withdrawn.
The administrators were appointed on 21 February, with the sale to Clays agreed the same day.
Clays paid £191,000 for TJ assets including its goodwill and name, contracts, stock and work in progress, fixtures and fittings.
Separately, the Bungay book printing giant paid £2.6m to Close Brothers Asset Finance and Compass Business Finance for assets that were subject to finance agreements.
Clays acquired the Padstow book printer via Clays 123 Ltd, now renamed TJ Clays.
The TJ Books estimated deficiency of just over £5m includes £3m owed to trade and expense creditors, nearly £300,000 owed to HMRC, and £187,500 to Lloyds Bank for a CBILS loan.
When the joint administrators were appointed, TJ’s book debt ledger was £1.74m, with invoice finance provider Investec having an outstanding balance of £1.6m and holding a fixed charge over the debtor ledger. As such this was excluded from the sale.
The joint administrators said that, based on current information, it was unlikely there will be sufficient realisations to enable a dividend to be paid to preferential, secondary preferential, or unsecured creditors.
132 employees transferred to TJ Clays as part of the sale.
TJ Books had sales of £15.4m in its most recent accounts, to 30 November 2023.
The firm runs litho and digital presses, has an in-house bindery, and offers publishers services such as auto stock replenishment.
