Prepack sale price of mattress machinery supplier revealed

Mattress machinery supplier MPT Group was sold for £105,000 in a prepack deal after falling into administration.

Rochelle Schofield and Mike Dillon, both of Leonard Curtis, were appointed as joint administrators of mattress machinery supplier to the mattress industry, MPT Group Limited on 14 April 2023.

Ahead of entering administration, the business had been trading successfully since 2009. In the year ended 30 April 2020, the company recorded turnover of £2.2m and a loss of £318,000, while the following year saw sales rise to £2.4m with a profit of £275,000. Sales for the year ended 30 April 2022 increased again to £3.6m but recorded a loss of £12,000.

Furthermore, the company secured a Coronavirus Business Interruption Loan from Barclays Bank in April 2020 in the sum of £400,000. Around £258,000 remains outstanding.

Due to a supply shortage of microchips required for its core range of machines, it prevented the company from being able to complete projects. The company worked towards anticipated delivery dates of the chips when undertaking work which resulted in a number of machines being part-made, which could not be sold as the chips had not yet been delivered and there was no certainty on delivery times.

These equipment delays exceeded 18 months, and whilst the company made efforts to try and continue, the increase of external pressures saw a decision made to appoint administrators.

The business was then marketed for sale, which resulted in seven expressions of interest from unconnected parties and one from a connected party. This whittled down to four unconnected parties returning non-disclosure agreements, resulting in one tabling an offer alongside an offer from the connected party.

A sale of the company’s business and assets was completed to newco, under common ownership, MPT Group Mattress Machinery Ltd for a sum of £105,000 on 14 April 2023, with all 18 jobs transferred under TUPE to the purchaser.

On completion, MPT Group Mattress Machinery Ltd, which was incorporated during February 2023, paid £12,500 and will pay the same amount during May followed by £8,000 in June. A further eight payments of £9,000 per month to February 2024 has been agreed.

With regards to creditors, the company owed the HMRC almost £70,000 as a preferential creditor and is expected to receive repayment, while unsecured creditor claims totalled £626,000, with a further sum of £41,000 owed to the HMRC. These claims included the Barclays debt outlined above as well as other trade creditors, totalling a combined figure of £330,000. It is anticipated that unsecured creditors will suffer a shortfall of £598,000.

At the time of securing the prepack sale, Rochelle Schofield from Leonard Curtis commented: “The pre-packaged sale achieved represents the best outcome for the company’s creditors as a whole and has resulted in the successful transfer of all jobs to the new entity.”

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