Struggling haulier Premier Logistics (UK) is set to enter a company voluntary arrangement (CVA) as it looks to restructure its finances in the face of a £5.7m shortfall to creditors, MT has learnt.
In a letter seen by MT dated 11 July, FRP Advisory stated that it had been instructed by Premier Logistics owner Lee Christopher to hold a meeting of creditors on 30 July, for the purpose of voting on a CVA for the loss-making firm.
In a document supporting the proposal, Christopher describes a period of ‘unprecedented financial stress’ for the business, adding that the CVA is the only way some of it will survive for a business with liabilities of £8.6m as of 10 July.
Premier Logistics made a pre-tax loss of £1.2m in the year ended 30 April 2017, which was triggered by the end of its work with former pallet network Pall-Ex and poor performances from two businesses it bought in 2015 - DA Clayton in Bicester and CJ Express in Hull. The former closed in December 2016, while CJ Express continued trading until last November.
Premier continued to make a loss during the rest of 2017, recording a shortfall of £87,174 for the eight months to 31 December.
Read more:
- Premier Logistics MD confident firm will bounce back
- Premier Logistics-owned CJ Express ceases trading
- Premier Logistics was loss-making in the final months of 2017
Earlier this year Lee said he was confident the business would recover, however the proposal document shows the business made a further loss of £355,000 in the five months to 31 May 2018.
If the CVA is agreed, unsecured creditors would receive 32.4p for every the pound they are owed. It would run for 35 months.
The proposal document adds that Christopher was introduced to FRP Advisory by Palletforce, which is a shareholder in the business and also Premier Logistics’ pallet network and gave the operator an emergency loan in December of last year.
Palletforce, which Premier Logistics has been a part of since 2016, has an 8% share in the company and is owed £585,000, although it has security for its loan and monies owed within its network.
Earlier this month Premier Logistics closed its Huddersfield depot and closed its MWC haulage operation, which was based there. Its Reading depot was due to shut down on 13 July.
