Creditors of Buckingham Group Contracting expecting a multi-million-pound payout following its collapse in 2023 have been told that while their compensation “will be sufficient”, its receipt is dependent on the successful collection of outstanding debts still due to the contractor.
According to an administrators’ progress report, covering the period between September 2024 to March this year, consultants from accounting firm Grant Thornton said their focus now is working with Leslie Keats quantity surveyors to collect outstanding debts owed to Buckingham Group from employers, as well as compliance and management relating to insurance claims.
And while it seems “likely” ordinary preferential creditors seeking a £1 million claim from Buckingham Group will be paid in full in the next three to six months, there is “unlikely to be a dividend” paid to the 1,396 unsecured creditors seeking a £300.8 million claim against the contractor, i.e. a distribution of profits to shareholders.
Meanwhile secondary preferential creditors, including HMRC, will receive a “proportion” of their claims, which could be up to £33.8 million,
Grant Thornton said: “We expect realisations will be sufficient to make a distribution to the secondary preferential creditor, however the quantum of a return is uncertain. This will be driven by the level of debtor recoveries.”
It added: “Whilst discussions remain ongoing with debtors, a considerable amount of work in respect to assessing the legal and commercial position on contracts has been undertaken in conjunction with Leslie Keats […] It continues to be our belief that there are significant sums due to the company and work will continue to be undertaken to progress discussions and potential commercial or litigation strategies for recovering these amounts, where possible. Future realisations are currently unknown due to the complexities around the ongoing debt collection.”
A VAT bad debt relief claim totalling £2.25 million from “pay less” notices by various employers was repaid to the Buckingham Group estate, following a tax claim made to HMRC.
Administrators also said funds totalling £7.5 million had been invested in the financial markets between September and December last year, generating a return of 4.1 per cent. This amount was later reduced to £6 million between January and May of this year, to settle preferential claims.
In September 2023, around the time Buckingham Group formally entered administration, Kier Group agreed to acquire all the rail assets of Buckingham, and its HS2 contract, for £9.6 million, safeguarding 180 jobs out 450 at risk at the time.
These were subsumed into Kier’s Transportation business, which designs, builds and maintains infrastructure for various sectors, including rail, highways, aviation and ports, through a pre-packaged sale and Scheme of Arrangement (SPA).
At the time, Buckingham directors and their advisers had been trying to secure refinancing for the £700 million turnover business in the wake of “significant cashflow pressures”.
Creditors of Buckingham Group are expecting an update on the administration in October.
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