Debts of nearly £14m will go unpaid after the collapse of South West construction company Midas – but the eventual sum could be more than £60m. Administrators for the fallen Devon giant have notified the High Court that they are moving to dissolve the companies Midas Group Ltd (MGL) and one of its subsidaries; Mi-Space (UK) Ltd (MSL).
Between them, the two Exeter-based companies will have no cash to pay claimants, apart from £1.35m owed to a bank. Administrators from global business advisors Teneo Financial Advisory Ltd were able to claw back some cash from debtors and by selling property in order to pay the secured creditor.
But the vast majority of creditor claims will remain unpaid, documents filed by Teneo at Companies House reveal. They show HM Revenue and Customs will end up short of more than £3.5m in unpaid taxes and 150 unsecured creditors will be left owed £10.2m. A Teneo report said: “Insufficient funds were realised to enable a dividend to be paid to unsecured creditors.”
However, these debts pale in comparison to those run up by another Midas business – Midas Construction Ltd (MCL). That company is estimated to owe nearly £47m, including £45m to unsecured creditors, with it being unlikely there will be any cash to pay them. MCL is still in administration and Teneo has had it extended until February 2025 by court order.
Exeter-headquartered parent firm MGL and its subsidiaries: building arm MCL, housing division MSL, Midas Retail Ltd, Mi-Space Property Services Ltd, Midas Commercial Developments Ltd and Falmouth Developments Ltd, all fell into administration in February 2022. They blamed a toxic cocktail of Covid, inflation, money owed to them but not paid, and cash-flow problems for causing a financial doomsday.
The collapse left construction projects unfinished and creditors in Plymouth, Devon and Cornwall owed money. The fall of Midas was blamed for contributing to the liquidation of Plymouth- and Cornwall-based construction firm DNS (South West) Ltd, which is expected to leave creditors short of more than £1m.
Just before its collapse, Midas had been ranked as the ninth largest private sector firm in the South West, by the Western Morning News Annual Business Guide 2022, with a reported turnover of £291,267,008 and 498 employees. But it had announced a £2m loss in 2021 – its first deficit in 40 years of trading.
The company had offices at Indian Queens in Cornwall, Exeter, Newton Abbot, Bristol, Newport in South Wales, and Southampton. Administrators were able to raise more than £800,000 by selling the offices in Newton Abbot and Newport for £992,000 and £984,000, respectively, and some development land for £150,000 so Lloyds Bank 2ould be paid as a secured creditor.