Collapsed truck rental and contract hire firm Prohire could owe its customers as much as £28m according to papers filed by its administrator.
The company, along with non-trading parent firm Prohire Group, entered insolvency proceedings in June after becoming loss making in recent years, according to Ernst & Young.
It blamed this on a contraction in margins on contract hire sales, which affected its trading performance and profitability, as well as racking up significant losses on the disposal of its fleet vehicles.
The administrator said losses on the disposal of vehicles totalled £1.5m in FY25 alone.
The company’s shareholder, NorthEdge Capital, injected £1.1m between Mid-May and early June in order to support short-term liquidity, but it rejected requests for further funding when Prohire’s business plan showed it needed another £4-£5m to stay afloat.
In a report to creditors, Ernst & Young said: “By the time this became clear, all of the cash previously injected by NorthEdge Capital in May/June 2025 to support the ongoing process had been absorbed.
“This meant the group had insufficient funds remaining to continue trading and no reasonable prospect of additional funds being secured on necessary timescales.
“The companies’ directors therefore concluded during week commencing Monday 23 June that the companies would need to enter an insolvency process.”
NorthEdge has previously confirmed to Motor Transport that it had provided the company with several rounds of financial support to protect the business and its people, but that it had been unable to find a solvent solution.
On appointment, the administrator came to the conclusion that Prohire could not continue trading due to its losses, the prospect of “substantial ransom positions” with several suppliers and insufficient funds to meet the estimated ongoing liabilities.
As a result, the company ceased to trade immediately, which led to 54 staff losing their jobs and the remaining 29 employees being kept on to assist the administrator temporarily.
Ernst & Young added: “Non-preferential unsecured creditors are estimated to be in the region of c£28m for Prohire and c£19.6m for Prohire Group.
“The final figure for total non-preferential creditor claims will not be known until all claims have been received and adjudicated and it is possible that this figure may be higher or lower than this.
“On current estimates we anticipate that there will be insufficient funds to enable a dividend to non-preferential creditors of either Prohire or Prohire Group.”
