Reports show scale of debts Orthios group left after collapse

Reports have been released that show the scale of debts the Orthios group has left after the recycling venture at the former Anglesey Aluminum site collapsed.

Orthios officially took over the site in Holyhead in 2016 after smelting came to an end in 2009. Following the failure of an attempt to develop a biomass facility they built a materials recycling facility (MRF) and were in the process of developing a Plastics-to -Oil (P-2-O) unit.

The company was praised by Prime Minister Boris Johnson on a visit to the island in January but in March the business collapsed, with around 140 staff losing their jobs.

Begbies Traynor were appointed as administrator to operator Orthios (Anglesey) Technologies Ltd (OATL) while Voscap Ltd have been appointed for Orthios Eco Parks (Anglesey), (OEPAL) which owned the 230 acre site.

Now they have both released notice of administrator’s proposals for the failed ventures.

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It shows creditors are owed in excess of £ 200m – with a vast majority bond holders who invest in the ventures but money is also due to local companies and workers.

In the case of those local businesses they are not expected to get any of the money back.

When it comes to OEPAL the report explained how the original proposal for the site was to develop a biomass facility with bonds issued to raise money to purchase the site from Anglesey Aluminum and develop the project.

But it says they failed to secure a contracts for difference (strike price for the energy produced) from the UK Government and a deal with a potential Chinese investor fell through.

This saw them change tack to a recycling operation – with a new venture (OATL) set up that was not liable for the previous bond debts, with the idea that profits from this business would help repay those bonds.

But the report says this was also hit by setbacks – including Covid, Brexit and the administration of a contractor. They obtained a £ 1.2m UK Government Coronavirus Business Interruption loan in February 2021.

Progress was made with funding backing from Cresta Estates and a Materials Recovery Facility was built. But with the Plastic to Oil facility 95% complete funding was cut back and a decision then taken by the main funder to place OATL into administration.

The security trustee for OEPAL acting for bond holders then placed OEPAL into administration as well.

The report outlines the huge sums owed to creditors. In terms of secured creditors OEPAL has debts of £ 115m owed to bond holders. Around £ 1.1m is owed to Close Brothers Asset Finance, who handled the UK Government backed CBILs loan.

There are then dozens of unsecured creditors who stand to lose over £ 1.2m.

In total the amount owed to creditors – including undertakings within the group – is over £ 131m.

In terms of realisations from land and machinery this has an estimated book value of around £ 5.5m meaning a gigantic financial back hole.

When it comes to OATL this company has two secured creditors, MBP Eco Parks Ltd, who are owed over £ 57m, and Cresta Estates, owed £ 20m.

Workers made redundant are owed £ 140,000 in pay arrears and holiday pay and HMRC are due just under £ 900K.

There are unsecured creditor claims of just over £ 1m. Staff should get some type of dividend as preferential creditors but unsecured creditors are not expected to receive anything.

The total estimated deficiency once debts and realisations are taken into account is £ 78.6m. This means across the two businesses over £ 210m is owed to creditors.

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