Modular firm in pre-pack administration despite CBILS loan

Liverpool-based firm Ideal Modular Homes has been sold through a pre-pack administration after struggling with cashflow following problems getting paid.

The £3m-turnover businesses has been bought by a new owner and in a statement said trading “continue[s] uninterrupted”.

The company, which was formed in June 2017, was hit by the coronavirus crisis and ceased operations during the spring lockdown. In June of this year, it obtained a cash injection under the Coronavirus Business Interruption Loan Scheme (CBILS) from Close Asset Finance.

According to an administrators’ report however, Ideal Modular was hit with a pay-less notice by a customer in respect “of a sizeable payment application” in September. No further information about the job was given in the report, but the lower payment was said to have hit its ability to borrow money and ultimately led to the pre-pack administration.

Administrators at Quantuma said the company owes unsecured non-preferential creditors £6.8m and it expects a £6.4m shortfall. Close Asset Finance is owed £1.7m.

The firm was bought by IMDH, a company incorporated in November and whose directors include Tom White, a member of Ideal Modular’s previous board and Christopher Snape, one of its shareholders. It has retained the 76 staff on its books and injected new investment into the firm.

In a statement, the company said: “The transaction ensures continuity to the running of the business, a strong financial platform for the company’s future and protects jobs.

“The process will create a seamless transfer of assets and employees from the legal entity Ideal Modules Limited into a new legal entity - IDMH Limited - and facilitates a quick and smooth transfer of the business, allowing trading to continue uninterrupted.

“We'd like to assure both clients and employees that there is no risk to the running of the company and all business will continue as normal. This is a positive step for the company’s future.”

Tom White, formerly of JP Morgan, has been named new chief executive, replacing company founder Luke Barnes, who has left.

Ideal Modular’s previous jobs have included a 156-apartment scheme called Uptown Irwell in central Manchester. In January it won a place on a £2bn framework for London-based housing association Hyde Group.