A CIVIL engineering business involved with major developments  such as Bournemouth’s BH2 building went into administration after being landed with unpaid bills worth millions of pounds.

A report reveals Woodmace Ltd and Woodmace Plant Ltd owed more than £13million when they went into administration in July and their assets were sold to a new company bearing the Woodmace name.

Unsecured creditors, owed almost £10m, are not expected to see any money.

Woodmace Ltd had faced an “unsustainable” number of county court judgements and winding-up petitions, administrators said.

A report by Begbies Traynor, joint administrators, said: “The company began to experience financial difficulties as a consequence of large, tier one main contractors delaying payment and/or withholding payment and running up large differences on accounts running into the millions of pounds.

“The position was exacerbated by extremely volatile cost inflation on materials due to the impact of the Covid-19 pandemic. The company suffered a number of client failures and, as a consequence, a number of unrecoverable bad debts.”

It added: “Ultimately, a significant number of County Court Judgements and winding-up petitions built up to an unsustainable level.”

Bournemouth Echo:

Restructuring firm Begbies Traynor sought a buyer for the firms, sending anonymised details to 30 parties in the industry and to 95 private equity firms, but had only seven positive responses and received two bids by the deadline. 

Finance company Bibby demanded repayment of a £1.45m debt on July 4-5 and Begbies became joint administrators on July 11. It sold the two companies straight away to Woodmace Concrete Structures for £369,000. The pre-pack sale saved around 100 jobs.

The new firm was set up by the companies’ own founder, John Oak, who had sold the businesses in 2020 to managing director Joshua Eiles-Clarke.

The administrators report said Mr Eiles-Clarke’s estimate that the business had enough assets to repay Bibby had proved “optimistic” and that another lender, Highmore Financing, was not expected to see a debt of £744,579 repaid.

Woodmace Ltd owed £1.13m to HMRC and £11m to unsecured creditors, including a debt of £4.1m to its sister company Woodmace Plant Ltd.

Woodmace Plant Ltd owed £403,723 to HMRC and £2.75m to unsecured creditors.

Unsecured creditors are not expected to receive any money.

Other high-profile projects Woodmace had worked on included Poole Quay’s Vespasian development, Stonehenge Visitor Centre, Bournemouth’s Livingstone Academy, Bournemouth University’s two “gateway” buildings and Southampton’s Horizon Cruise Terminal.