Textiles wholesaler Sadaqat Global was sold for a sum of £430,000 after it collapsed into administration.
David Shambrook and Anthony Collier, both of specialist business advisory firm FRP, were appointed as Joint Administrators to Sadaqat Global Limited, now known as SQG Realisations Limited, on 5 December 2022.
The business entered administration after experiencing sustained cashflow difficulties and was sold to SG UK International Limited, a company incorporated 12 December 2022 under common ownership.
The sale included £228,000 of stock, £35,000 for the IP, £65,000 for goodwill, £80,000 for IT, plant and equipment, £20,000 for vehicles and £1,000 for customer and supplier contracts.
The total sum of £430,000 was paid in full on completion, which was agreed on 23 December 2022.
In a statement upon appointment, administrators said: “The company suffered sustained cashflow difficulties in recent months and was unable to meet its financial commitments. The Joint Administrators have been unable to resurrect trading of the business and all employees were made redundant on 12 December 2022.”
Established in 2008, Sadaqat Global is a wholesaler and distributor of household goods, predominantly linens and home textiles. The business operates out of a base in Trafford Park, Manchester, and a satellite warehouse in Blackburn.
The newco secured a license to continue to occupy the premises for a period of one month following the sale, and has since secured an additional month running to 22 February 2023.
Administrators confirmed that due to insufficient funds, unsecured creditor claims valuing £10.8m are likely to receive no realisation unless funds become available following secured settlements. As for secured creditor, Santander bank – owed £9.9m, the outcome will be subject to debtor ledger recovery, which will be reviewed and updated in the coming months. It is expected it will suffer a shortfall of £4.3m.
Preferential creditors, which include employees claims of £200,000 and the HMRC, could receive a dividend, however, this remains uncertain and subject to asset realisations. Administrators anticipate that creditors will suffer a total shortfall of around £18.5m.