Exeter-based construction giant is in administration and assets are only likely to pay for small fraction of money owed, a new report reveals
William Telford www.devonlive.com
The fallout from the collapse of South West construction giant Midas is even worse than initially thought with more than £60m of debts now unlikely to be paid including £4.5m owed to its own employees. New figures from administrators reveal nearly £70m is being claimed by creditors with more than 1,500 of them likely to receive no cash.
Reports from global business advisory firm Teneo Financial Advisory Ltd show the two main companies in the Midas family – Midas Group Ltd and Midas Construction Ltd – have realisable assets of just £8,354,644. But when preferential and secured creditors are paid it means there will be a predicted shortfall of £60,290,904 for the hundreds of small firms and individuals in the supply chain.
This includes £4,578,369 owed to 300 Midas workers who were made redundant when the companies went bust. That’s an average of about £15,000 each. Although headquartered in Exeter, Midas was involved in huge construction projects across the South West and companies owed cash include several in Plymouth.
Midas Group Ltd and its subsidiaries Midas Construction Ltd, Midas Retail Ltd, Mi-Space (UK) Ltd, Mi-Space Property Services Ltd, Midas Commercial Developments Ltd and Falmouth Developments Ltd all fell into administration in January 2022 blaming a toxic cocktail of Covid, inflation, money owed to them but not paid, and cash flow problems for causing a financial doomsday.
Administrators at Teneo Financial Advisory Ltd have now revealed Midas Group Ltd owned two office blocks, in Newton Abbot, in Devon, and Newport, in Wales, which are expected to sell for £1m and £1.3m. But when preferential creditors have been paid it leaves just £844,169.
Once some secondary preferential claims are settled it will mean an estimated deficiency for creditors of £9,015,966. A list of those owed money shows 61 employees are claiming £1,407,669 of that sum.
But the vast majority of the Midas debt is with its commercial construction arm Midas Construction Ltd. A report by Teneo shows £7,329,500 is likely to be clawed back from customers who owed the firm money. But this is a fraction of the £48,560,404 it was owed when it went belly up, and included the £36,902,858 value of work in progress when Midas fell into administration.
Once preferential and secondary preferential creditors and floating charge holders have been paid it leaves a mere £3,394,786 for unsecured creditors. But £51,274,938 is owed to more than 1,500 of these creditors meaning there will be a shortfall of £47,880,152. The list of creditors shows Midas 239 employees are owed £3,170,700 of that sum.