Stewart Milne’s supply-chain creditors are set to lose almost all of the £153.8m they are owed, according to administrators.
So far, 1,375 unsecured creditors have come forward, although administrators from Teneo expect the number to increase. Any payout is expected to be less than a penny in the pound.
The Scottish housebuilder, which went into administration in January, also owed £107.9m to the Bank of Scotland. The administrators do not expect this debt to be paid off in full, despite the group using £62m from the December 2021 sale of its timber-frame business, Stewart Milne Timber Systems, to repay the bank.
Teneo suggested that claims worth £200,000 for the wages, holiday pay and pension contributions of 208 staff may be paid in full, as may a £1.8m debt owed to HMRC.
When it entered administration, Stewart Milne had partially completed 10 residential developments on land it owned. Multiple bids to take over the unfinished sites have been submitted, with JLL leading the second phase of the sales process.
Directors first tried to sell the group in April 2022, as several debts became due for repayment.
The firm tried again in May 2023, approaching around 50 parties. They were unable to make a sale due to “the challenging market backdrop, reduced net asset value of the group and the group’s contingent liability position”, according to Teneo.
The last attempt fell through on 3 January 2024, meaning the company was unable to meet its debts and continue.
Founder Stewart Milne said in the wake of the firm’s collapse: “I am devastated by this totally unexpected outcome of the sale process and struggling to accept it, given the profound impact it will have on employees, subcontractors, suppliers and customers.”
The firm had made a pre-tax loss in three of the four years prior to entering administration, although it posted a pre-tax profit of £16.5m in its final year of trading.
BDO is taking charge of the administration of subsidiary Stewart Milne North West England (Developments) Ltd, which went down four days after the rest of the group. Construction News previously revealed that the arm owed Homes England £9.2m at the time of its collapse.
