One of Wales’ leading construction firms, WRW Construction, collapsed owing creditors nearly £30m.
Despite having an order book worth £60m, the family-owned and run firm, headquartered in Llanelli, was put through by its directors in July after coming under what it described as significant financial distress. With offices also in Cardiff and Bristol more than 100 staff were made redundant.
The administration process is being run by professional advisory firm Grant Thornton.
The biggest single creditor is alternative lender Thincats, which is owed £10m.
Having initially provided a multi-million pound funding line in 2019 to support WRW’s expansion plans across South Wales and the west of England – secured against company assets including property and plant and machinery – in June 2020 Thincats provided a further £5.1m through the Coronavirus Business Interruption Loan Scheme (CBILS).
One of the UK Government’s flagship responses to support firms impacted by the pandemic, the now closed CBILS provided a 80% government guarantee to its accredited lenders, like Thincats, in the case of default.
Unsecured creditors of WRW are owed a further £18.3m. This includes £9.5m in money yet to be invoiced by WRW’s subcontractors at the time of it going into administration and a £400,000 unsecured directors loan.
The joint administrators are Alistair Wardell and Richard Lewis of Grant Thornton.
Directors of WRW are expected to soon publish a statement of affairs, giving their assessment of what they think assets of the business could be worth for redistribution to creditors.
This is expected to include a £2.2m valuation of its property assets. It is also expected to claim that unsecured creditors could get up to £800,000 from the sale of assets.
However, due to the contractual nature of the business it could take several years before Grant Thornton is able to finalise the collection of the work in progress, debtors and retentions. Only at this point will the unsecured creditors learn what amount they will ultimately get back, but whatever the actual realisation the vast majority of money owed to unsecured creditors will not be recoverable.
At the time of going into administration WRW said in a statement: “Despite a significant order book of over £60m to be delivered within the upcoming 12 months, a supportive lender, fantastic staff and prospects, regrettably, owing to a series of events the last week, including an unfavourable adjudication outcome, the business was put under significant financial stress.
The directors have worked tirelessly with their advisors and funders to look for solutions for the business to remain viable.
“Unfortunately, it has been regrettably determined that no viable options remain, and administration is the best course of action to preserve value for stakeholders and creditors.”