Aspray Transport’s Company Voluntary Arrangement (CVA) will see £1.9m of debt to certain creditors being written off as well as redundancies, motortransport.co.uk can reveal.
The haulier, which trades as Aspray24, was acquired by Lee Bushell’s Bushell Investment Group via holding company Bullamasay XL on 5 March.
A decision to propose a CVA was taken shortly after, when its new owners concluded that the haulier would not be able to pay its debts as they fell due.
This was despite the new owners investing “significant financial and operational resource in the sales and costs infrastructure of the business”, according to a copy of the CVA proposal obtained by motortransport.co.uk.
The decision to put the business into a CVA saw Aspray Transport owner Pat Laight sever ties with the haulier. The proposal itself was adopted on the 23 April without amendment.
Details of the CVA were not made public at the time, although the proposal document reveals that creditors of the business faced two options: a CVA or liquidation of the business.
Read more
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- Aspray24 sold to Bushell Investment Group
A core component of the CVA proposal, which was run by RSM Restructuring Insolvency, was the division of unsecured creditors into two classes: critical and non-critical.
According to the document, critical creditors were deemed essential to the haulier’s long-term viability. They were owed £2.5m collectively, and as previously stated will be paid in full over the CVA’s term.
However, non-critical creditors will receive just 5p in the pound as will the taxman and category 2 landlords (specifically in regards dilapidations for a number of leased units), the proposal document shows.
HMRC is owed more than £1m, non-critical creditors close to £300,000 and the category 2 landlords £647,000 in dilapidations coming to £1.95m in total.
Under the agreed repayment of 5p in the pound for these unsecured creditors, just £97,500 will be paid back leaving them to shoulder a collective loss of close to £1.9m.
The document also states that as part of the CVA process, approximately 65 redundancies are expected to be made at Aspray Transport, 19 of which were earmarked at the haulier’s Willenhall headquarters.
This follows 173 redundancies last year under the previous owners. Based on figures in the report this latest reduction would leave Aspray Transport with a staff of approximately 450.
As part of the insolvency procedure, owner Bullamasay XL promised a further £1m of working capital would be made available to the haulage business after the adoption of the CVA.
A new invoice finance facility was agreed with Bibby Invoice Discounting ahead of the CVA.
Legacy issues
Approached by mototransport.co.uk about the document, a spokeswoman for Aspray Transport did not contest the accuracy of the figures within, or the outcome outlined for creditors of the business.
She added: “The CVA approved by Aspray Transport’s creditors was designed to address a number of legacy issues that were undermining the historic performance of the company.
“It focused on ensuring that the company’s critical supply creditors were unaffected by the process, and that they were paid in full.
“This compares favourably to other CVAs in the sector, which is why 99% of Aspray Transport’s critical suppliers supported the proposal, and continue to support the business today.”
The company was approached for comment on the redundancy process too but had not responded as this article was published.
Aspray Transport expects the CVA to be completed within six months of its start date.
