PC Harrington administrators ‘not optimistic’ for creditors

In an update to creditors, KMPG also asked for an extension of the administration after discovering a complex network of disputes, claims and counter-claims involving the company.

The administrators said resolving these claims could take up to three years and so asked for an extension of their remit to May 2017.

In the update, KPMG said: “Based on the progress made to date, our agents [quantity surveyor agent Leslie Keats], currently estimate that it could take between two and three years to complete the account reconciliation and collection process and are not optimistic about the level of recoveries that might ultimately be achieved.”

KPMG said unsecured creditors “should receive a dividend” but it did not yet know how much these would amount to.

PC Harrington Contractors entered administration in April owing £28.4m to suppliers, although at least half of this was owed to other subsidiaries of parent company the Harrington Group.

Of these, Slipform International was owed £7.8m, while P&E Plant Hire was owed £6.3m.

In the latest update, KPMG said: “The historic inter-company transactions between the various members of the group were significant and complex and the processes to reconcile and agree the final balances is ongoing.”

It added that payment derived from inter-company deals “is potentially the most significant asset available to the creditors”.

However, the administrators warned that it would not realise value from any sale of subsidiary Slipform International, which is still trading, despite the holding company owning 100 per cent of its shares.

They said this was because Slipform “has significant negative net assets… despite being a relatively profitable and well-regarded business”.

They added: “We are in discussion with the management team of SI and the wider group about the situation but, given the balance sheet situation, we are not currently expecting to realise any material value for our shares.”

Since the administrators took over PC Harrington Contractors, it has emerged that the concrete specialist had become embroiled in disputed claims involving Mace and Keltbray, worth £28m and £1.5m respectively.

At the time of the administration, the company held just £900 in its two bank accounts, with a further £50,000 held by solicitors on its behalf.

Major creditors include Lafarge Tarmac, which is owed £2.5m, steel manufacturer BRC ( £2.1m) and insurer Mitssui Sumitomo (£1.3m).