The company that acquired Caledonian Logistics before it collapsed last year said it had found “significant additional financial obligations” that had not been disclosed to it before buying the haulier.
The revelation is contained in a report to creditors of the Inverness firm, which explains how the 25-year-old logistics business became insolvent and entered administration in November 2024.
Caledonian was acquired by Drac Global in 2022, but administrators at Johnston Carmichael said that following the purchase its board had identified extra costs that had not been divulged.
This included a commitment entered into by Caledonian Logistics before the sale relating to “new trucks under a finance arrangement costing around £750,000.”
The administrator said that together with these unexpected additional liabilities, trading conditions were challenging due to industry-wide high staff turnover and inflationary pressures.
“This was exacerbated by the inherited operating model, which was restrictive in terms of the low rates charged to customers,” the report added.
Drac was forced to heavily subsidise the haulier and then it took the decision to acquire the struggling firm’s trading premises in Kintore, Aberdeenshire for £1.8m.
This enabled Caledonian to settle a £581,447 bill with HSBC and then Drac leased the premises back to it.
The report said: “Despite the cost streamlining exercise and sale of assets, the company’s cash flow position continued to raise concerns with both the parent company and Bibby, who were advancing funds in respect of the sales ledger but were aware that the company was experiencing financial difficulties that could lead to their over exposure.”
HM Revenue and Customs then tried to install a repayment plan for a £279,000 debt at £5,000 a week, but it was determined that Drac could not continue providing financial support in the long-term.
As Caledonian Logistics was a Palletways member, the network was able to find operators to take over its contracts.
Johnston Carmichael said these hauliers were also able to protect the jobs of the majority of employees; it emphasised that it was not involved in the transfer of the company’s business operations and was only appointed administrator after this agreement was completed.
It is understood Caledonian Logistics employed around 130 staff. It also held a licence authorising 80 lorries and 103 trailers.
The administrator added that current estimations suggested there would not be a distribution to unsecured creditors.
