Hampshire haulier Alton Transport Service has admitted that taking on “loss making” work from Palletline and losing a contract from Tarmac were to blame for its insolvency.

The directors explained to administrators why the firm was struggling to continue trading shortly before the business and assets were sold in a pre-pack deal to Alton Transport Storage at the end of August.

In a report to creditors, Quantuma LLP said the company directors had advised them that it had become insolvent due to “taking on work through Palletline which ultimately proved to be loss making for the business” and the “loss of the Tarmac contract resulting in a £75,000 bad debt".

Alton Transport Service was established in February 2015 and held a licence for 22 HGVs and 30 trailers out of premises in Bordon, employing 19 staff by the time of its administration.

The company had put forward a proposal for a CVA, but this had been rejected by creditors before Quantuma undertook a pre-pack sale of the business.

Purchaser Alton Transport Storage has a shareholder, David Larvan, who is also director of Alton Transport Service.

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Kelly Larvan is a director of the purchasing company and was also a shareholder of Alton Transport Service.

The business was sold for £30,000 and staff were all transferred over by TUPE.

An operator licence application in the name of Alton Transport Storage remains under consideration.

Estimated claims from unsecured creditors of the insolvent business are £320,769, with £247,282 thought to be owed to HMRC.

Graham Leitch, Palletline group MD, said: “Following a prolonged period of support from Palletline, in January 2018 we had to make the difficult decision to ask Alton Transport to leave the network in order to ensure quality service provision was maintained in the area they covered and also minimise any financial risk to the network and our members.

“We have 76 shareholder member companies trading successfully as part of the Palletline network and we believe our offer is a valuable and profitable element of their businesses.”