An 11th hour plea by the new owners of Aspray Transport, days before it went into administration last month, that its operating licences be surrendered rather than revoked, to avoid “negative connotations”, was rejected by the traffic commissioner who ruled that it “must have been abundantly clear” during due diligence that the firm had insufficient funds to qualify for the eight licences.
Willenhall-based Aspray Transport, the delivery arm of Aspray Group, traded as Aspray24. It operated a fleet of around 190 trucks and 170 trailers from 13 depots across the UK.
It went into a CVA in April this year, one month after being acquired by Bushell Investment Group, which also owns BIG Property Finance, a short term loans specialist.
As a result the company was requested to attend a public inquiry held by traffic commissioner (TC) James Astle on 5 August at which it was informed its eight licences were “likely” be revoked on the basis of the company’s financial standing.
Following the public inquiry, according to the TC’s final written decision, the company emailed the TC requesting it be allowed to surrender the licences on the grounds that it had inherited rather than created the company’s financial problems.
The company argued that it would be “unfair to tar the current directors with that brush” which could create “negative connotations” in the “trade press” and among “third parties.”
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The TC rejected the request on the grounds that “it must have been abundantly clear” to the present directors and shareholders, during “any vestige” of due diligence enquiries ahead of the purchase, that the operator “could no longer fulfil the requirements of financial standing or was unlikely (to) in the near future” and therefore the new owners “must or should have been aware of the inevitable consequences.”
However the TC did grant the company’s request that the revocation take effect on 31 August “to allow what (the company) calls ‘an orderly run-down’ of the business.”
The TC’s report attributed the firm’s financial problems to “rising wages, fuel, and professional costs to deal with regulation” which saw profits decline from 2.3% of sales in 2014 to o.5% of sales in 2018.
This was compounded by capacity issues with a “substantial” contract with packaging company Kite, signed in the spring of 2018.
A failed attempt to renegotiate the contract forced the firm to cut costs by closing its Harlow depot in November, which made 173 staff redundant.
Despite negotiating a deferred payment agreement with HMRC, to which it owed £1m, in November, lower than anticipated activity in January this year and a failed attempt to raise funds finally led to the owners to sell the company to Bushell Investment Group on 5 March.
A spokeswoman for Bushell Investment Group said the new owners had made “huge efforts” to address the company’s financial problems.
“Unfortunately, given the company’s debts and the broader economic challenges in the market, these efforts were unsuccessful,” she said, adding that these factors combined with the TC’s decision to revoke the operating licences “left us with no other option than to appoint administrators to Aspray Transport.”
She said: “We are desperately sad for the employees and customers of Aspray Transport,” adding that the “vast majority” of the firm’s 449 staff had found employment “within the last ten days” with 20 finding employment within the group.
A former employee said: "I’m not sure that there were huge efforts given that 80% of CVA’s fail."
