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PRIVACY
Enterprise

Unsecured creditors of collapsed Tillery Valley Foods unlikely to get anything back say joint administrators

The Abertillery-based business entered administration in May with more than 200 job losses

Tillery Valley Foods entered administration on May 17, 2023(Image: Google Maps)

The vast majority of creditors of collapsed food business Tillery Valley Foods are unlikely to receive anything back, joint administrators have confirmed.

In a proposal report, which has now been approved by creditors, Timothy Bateson and William Wright of insolvency firm Interpath, said the business was put into administration by its directors in May after a sales process to find a new owner, despite agreeing increased prices with customers, failed to result in a deal.

The Welsh Government was looking to back a management buyout of the business, which it said was made more challenging after the freehold interest in the factory site was sold last December in a sale and lease back deal.

Impacted by significant inflationary pressures, particularly on its energy and food costs, for the financial year 2022, Tillery Valley Foods suffered losses of £900,000 on revenues of £25m. For the five months to March 17th this year, the business incurred losses of £900,000 on revenues of £9.8m. The business, originally set up in 1986, had a string of NHS and local authority supply contracts across the º£½ÇÊÓÆµ.

The joint administrators said: “We considered whether it was possible to trade the business in administration, however this was not deemed a viable option due the lack of funding/support, a withdrawal of key customers in the lead up to the administrators appointments.”

On entering administration more than 200 jobs were lost with immediate effect, with 21 staff kept on to support the joint administrators in asset realisation. That number has since been reduced to nine.

Tillery Valley Foods was acquired by private equity backed firm Joubere Group from Sodexo in 2021. The acquisition was funded by a combination of funds injected by GQS and Arbuthnot. It is anticipated that primary secured creditor Arbuthnot, will recover all of its £1.26m. Tillery Valley Foods’ debtor book was assigned to Arbuthnot under an asset-based lending agreement in August, 2021. At the time of administration the debtor position was £2.2m.

However, based on current estimates the joint administrator said it is unlikely that GQS, the secondary secured creditor, will recover any of the £108,000 it is owed.