By RYAN TAYLOR
Unsecured creditors of failed fish processing firm No Catch will only receive a penny out of every pound they are owed when they are eventually given their cash back.
The frank admission from administrators Grant Thornton will leave up to 200 businesses out of pocket as they attempt to secure lost investments a year on from the collapse of the Vidlin-based organic cod farming business.
The problem has been exacerbated by the subsequent failure of the bank which kept No Catch afloat before cancelling its loans and overdrafts when the pioneering business accumulated £40 million in debt.
In a letter sent to creditors by Glasgow-based accountant Rob Caden at Grant Thornton, creditors were told the prescribed part – the amount of money available to unsecured creditors – would amount to 1.11 pence in every pound.
The money will be drawn from a limited pot of approximately £200,000 available to unsecured creditors.
Mr Caden said there would be no return to unsecured creditors other than the prescribed part.
Helping finance No Catch before its demise was the UK arm of Icelandic bank Kaupthing, Singer and Friedlander.
It went into administration in October as Iceland went through its own turbulent economic meltdown.
That has delayed things further for creditors, who now have to wait longer for the administrators to sort through a much-increased workload.
“Normally in this situation the administrators have to report back to secured lenders and to get agreement on certain matters,” said Mr Caden.
“Because they are also themselves now in administration we are effectively dealing with a third layer of work that we have to get through.”
Last year administrators were forced to defend their fee structure after it emerged the accountants were charging up to £443 an hour each for their services.
Mr Caden said the cost of the administration had come to £700,000, charged at an average hourly rate of £248, although the fees would have been much lower had a proposed deal to sell off the business as a whole just after it went into administration reached fruition.
In the meantime, it’s still unknown how much of the £1.08 million paid out from what was then Shetland Development Trust will be clawed back.
Some of that money is secured against assets, including work boats, but despite initial payments of £356,000 last year, the council’s development wing is still waiting to hear how much of the remaining balance it will receive.
The collapse of No Catch on 19th February last year was blamed on excessive costs and over-ambition within the company.
Producing organic cod led to a 15 to 20 per cent increase in feed costs, and restricted the availability of permitted vaccines.
A refusal to sell cod to large supermarket chains under their own labels also cost the company dear.
Once on the scene the administrators decided the best option for the business was to continue trading in order for it to be sold as a going concern.
Since then the former No Catch cod and salmon sites have been snapped up by two Norwegian business giants – Scottish Sea Farms and Hjaltland Seafarms.
Hjaltland was handed control of seven sites for its £3.6 million.
The move was seen as an opportunity for the Norwegian firms, which between them already owned two thirds of Shetland’s salmon industry, to further tighten their grip on the local market.
Meanwhile the company’s mussel farming sites were bought by Blueshell Marine in Brae, while fledgling company QA Fish – created by former No Catch staff Gordon Johnson and Robert Williamson – bought the group’s organic sea trout business.
The one remaining asset still to be sold off is the former fish-processing plant at Blydoit in Scalloway.
As reported in The Shetland Times, efforts are underway to sell the building to Shetland Abattoir Co-operative Ltd (SACL), which has applied to the council to convert the building into a meat processing plant.
Administrators hope the sale of the building should go through within the next couple of months.