Unsecured creditors of a long-standing Belfast demolition company which went into administration before Christmas may end up receiving just about 6p in the pound, an administrators report has indicated.
McCormack Demolition in Mallusk and its sister company McCormack Site Services (Ireland) Ltd, which had been in business for more than 40 years, collapsed in November owing just shy of £2 million.
A brief statement posted on the McCormack website at the time read: “Please note that on November 14 2023, Tom Keenan and Scott Murray of Keenan CF were appointed as joint administrators of the companies.”
McCormack, which has carried out work across the UK, said that, like many in the construction sector, it was “materially impacted” by the Covid pandemic, with prolonged site closures and project delays impacting profitability and cash flow.
It sought and gained additional finance to bridge the cash flow impact, and throughout 2021 and 2022 funded the business via a combination of reserves and hire purchase finance.
But due to a combination of loss-making contracts, price inflation for both staff and materials, and the general slowdown in the construction sector, it remained in trouble through into late 2023 and approached external accountants to advise on a contingency plan and to consider restructuring options.
And following further delays on projects which negatively impacted cash flow, the directors concluded that administration was in all stakeholders’ best interests.
A proposal to creditors in January indicated that the estimated payment for unsecured creditors will be in the range of 6.42p and 10.68p in the pound.
Administrators anticipate recouping a sum of at least £1.3 million when McCormack Demolition’s entire assets go up for auction on Tuesday February 27 at the UK and Ireland’s largest independent auction house Wilsons.
The assets will be offered with no reserve, which means all lots - which include EC380 excavators, Brokk machines, containers, machinery attachments and construction equipment, commercial vehicles, and HGVs - will be sold to the highest bidder on the day.
The most valuable asset is a 2022 Volvo EC480 EHR 48 Tonne Tracked Excavator (currently located at the Wilsons site in Maidstone, Kent, which should fetch upwards of £60,000.
Of the assets, around £560,00 is owed to Danske Bank and another £104,000 to AIB in hire purchase payments, while another £634,000 of plant and machinery not under any credit agreement will also come under the hammer.
Richard McFetridge, who is plant, machinery and commercial manager and auctioneer at Wilsons Auctions, said: “We’re delighted to be acting on behalf of Keenan CF with Tom Keenan and Scott Murray on this case.
“McCormack Demolition was at the forefront of the UK’s demolition industry, and this auction acts as an ideal opportunity for companies and individuals in that industry, and others, to purchase additional well-maintained quality stock or upgrade their existing portfolio.”
Working videos of the machinery and the final catalogue can be viewed at www.wilsonsauctions.com.
