2e2 secured creditors returned 7.4p in the pound so far
Just £19m of £257.2m secured debt pile handed back to date, administrators' report reveals
Administrators have realised just £36.5m from 2e2's assets so far and creditors owed a chunk of the firm's £250m-plus of secured debt have been warned to brace for "a significant shortfall".
Unsecured creditors are set to receive practically nothing, but 2e2 UK Limited employees are likely to receive unpaid wages, holiday allowances and pension contributions in full. This is according to a six-monthly update report, seen by CRN, that was issued to creditors recently by the joint administrators from FTI Consulting.
Since the appointment of FTI in January, a total of £36.5m has been realised from the wreckage of 2e2, chiefly from the sale of chunks of the business. Logicalis paid £20.6m for the purchase of 2e2's Dutch, Spanish, Irish and Channel Islands operations, with a further £2m realised from money held in escrow. O2 paid £4m to buy out 2e2's share of the two companies' Unify joint venture, while Daisy coughed up £2.8m to the fallen integrator's datacentre operations.
Some £5.8m has thus far been collected from debtors, and the report claims that a further £2m will likely be recovered following "ongoing negotiations" with debtors.
Total secured debt at the time of 2e2's demise stood at £257.2m, and the report indicates that so far just £19m in "fixed charge distributions" has been paid to secured creditors across the 2e2 group. More returns will be made in due course, subject to how much can be realised from other fixed and floating charges. But secured creditors are warned that a "significant shortfall" is ultimately expected.
Unsecured creditors are told to expect no returns at all, outside of "prescribed part" returns from the net realisation of floating charges. Such returns are likely only for unsecured creditors of 2e2's MS, UK and Diagonal subsidiaries, and in each case payments are expected to be no higher than one pence in the pound.
The news is better for preferential creditors of 2e2 UK Limited – all of whom are staff owed wages, holiday pay or pension contributions in arrears. Employees of the company are set to see their claims repaid in full, although there is no such luck for creditors of 2e2 Holdings Limited, who will receive nothing.
A total of 38 parties have filed retention of title (ROT) claims in relation to the return of stock held by 2e2 at its demise, with 31 of these resolved in full. Two more are in the process of being resolved, and the remaining five are "potential claims notified by trade insurers where no claim submission has been received from the supplier".
Today's report also reveals that, since FTI was appointed to oversee the administration process, it has received a total of £3.14m, in addition to a sum of £128,245 that was billed and paid prior to the appointment of the joint administrators. A further £411,773 in time costs for the six-month period covered by the report has yet to be billed.