Stephen Shaylor
Shaylor Group, which fell into administration in June this year, owed a total of £46.3m to creditors, documents filed in Companies House have revealed.
Unsecured creditors, which include trade creditors, who collectively claim to be owed £19.2m are likely to receive nothing. Allied Irish Bank, which claims to be owed £14.5m, is also likely to face a significant shortfall, despite its status as a secured creditor.
The Shaylor family itself is owed around £2.2m in loans, which were injected earlier this year in an attempt to shore up the business’s cashflow, while former chief executive Stephen Shaylor is listed among the company’s creditors as being owed £5.4m.
Trouble for family-owned Shaylor Group started not long after 55% of its parent company SHL was sold to an employee ownership trust scheme in October 2018. The deal to sell a portion of SHL, which was run by directors Stephen Shaylor, Richie Shaylor and Lana Shaylor, children of the group’s founder Fred Shaylor, as well as fellow director Paul Hooper-Keeley, was financed by a £13.5m loan from Allied Irish Bank, together with a £3.2m reinvestment by SHL.
However, by the start of 2019, the company, which employed 210 staff, was already experiencing cashflow problems, according to administrator FRP Advisory, in a report on the circumstances of the company’s collapse and its proposals for winding the business down.
Additional funding
Shaylor first approached FRP in February 2019 with a view to exploring options to raise additional funding for the business, before the directors then injected around £2m into the business between February and April 2019.
Directors blamed tightening of credit terms, failure of key subcontractors which resulted in project delays, diversification of the company’s client base towards more private work which resulted in more disputes, delays and bad debts as some of the reasons for its difficult trading position. It also experienced significant build-up in sales reserves (work in progress) due to legacy disputes on large, developer-led contracts.
And there were delays on projects as a result of subcontractors reducing activity levels because Shaylor was operating outside of agreed credit terms, which pushed up the cost of contracts and narrowed margins.
The injection of cash by the Shaylor family failed to solve the group’s cashflow issues, and after the directors failed to secure an extension of facilities from the bank, they agreed to consider an accelerated sale and refinancing process. Meanwhile, the business had limited success in accelerating cash collections from debtors despite the fact that creditor pressure continued to increase.
While there was interest in an accelerated sale, on 14 June, it was decided there was no realistic prospect of completing a transaction in the timescale and the company was placed into administration on 17 June.
FRP is now engaged in selling off Shaylor’s remaining assets and winding down its affairs.
