Headlam Group has sold its Thatcham distribution centre, two flooring businesses and its main intellectual property to Likewise Group for £14.9m plus VAT. The sale completed yesterday and was announced today, with no conditions outstanding.
Joint administrators Will Wright, Chris Pole and Ryan Grant were appointed to Headlam and its trading arm HFD Limited on the 8th of September. The shares are suspended, and the administrators intend to seek cancellation of the listing.
The package includes the freehold of the 90,000 sq ft Thatcham site, some operational assets and stock, the trade and assets of Crucial Trading and of Concept Flooring (West Bromwich and Stoke-on-Trent), and the principal intellectual property.
Thatcham accounts for £12.9m of the price, against a book value of £4.0m and a last third-party property valuation of £11.75m. Other assets fetched £1.1m against roughly £6.0m on the balance sheet, while brands and IP brought £0.9m against a nil book value. The company expects a profit on sale, booked as non-underlying income.
The administrators say they are satisfied with the values after an accelerated marketing process since their appointment. The other-assets price was reached after considering a recent third-party valuation of the assets’ realisable value.
The business kept trading while options were explored, including a Company Voluntary Arrangement (a deal with creditors) plus wider debt restructuring, and a sale of the whole business in one transaction. The administrators concluded that selling in parts is the best and most deliverable outcome for creditors, and that leaving administration via the restructuring is no longer tenable.
Net proceeds will be used to meet administration expenses and the claims of secured and preferential creditors. After a review of the retained affairs, the company says unsecured creditors are unlikely to be paid in full, and a return of capital to shareholders is also unlikely.
Under Listing Rule 21.3.5R, the administrators plan to ask the Financial Conduct Authority to cancel the shares’ place on the Official List and their trading on the London Stock Exchange main market. A further announcement will follow “in due course”, with no date given.
Likewise has also agreed to act as agent for the administrators over the next nine months, selling the group’s remaining inventory in an orderly way so the UK floorcoverings market is not disrupted.
