‘Biological Incident’ Cited in Collapse of Seafood FirmNeil Hardie
A “biological incident” has been listed as one of the reasons behind the collapse of an Angus seafood producer.
Arbroath-based Dawnfresh went into administration last month, but a deal was agreed to sell its Arbroath facility to Lossie Seafoods Ltd, a subsidiary of Associated Seafoods Ltd.
That saved nearly 250 jobs in Arbroath.
Almost 200 workers at the company’s Uddingston facility lost their jobs.
Tom MacLennan, Callum Carmichael and Michelle Elliot, partners with FRP Advisory, were appointed joint administrators.
Now their administrators’ report, published at Companies House, has set out the reasons behind the fall of the Angus firm.
It said FRP Advisory was approached by the board in November last year to carry out a review of the group.
“They considered either a sale of the Uddingston site and merger of operations with its facility in Arbroath,” the report said.
“This strategy had been developed by the management team during 2021.”
The business had been impacted, the report said, by a “biological incident in Dawnfresh Farming Limited, a weakened trading position in the company and increased costs of merging facilities”.
The administrators did not respond to a request for comment on the nature of the biological incident.
It added that £10 million of funding would have been required for the business to continue until August this year.
The administrators’ proposal said funding “at this level” was not available.
An accelerated sale process was then initiated for Dawnfresh Seafoods Ltd and RRSS Realisations Ltd. It acquired the former Perimax building next door to its site at Kirkton Industrial Estate.
There were plans for a £5m investment in the premises.
The former Perimax building has been entered into an auction that takes place on Wednesday.
In the report, the administrators say the firm has insufficient property to pay unsecured creditors.
Bank of Scotland holds a floating charge over the company’s assets.
The report adds: “It is anticipated the bank will receive a partial return from the administration and ultimately be repaid in full from group assets, of which they hold a security.”
HMRC is listed as a secondary preferential creditor, while the only unsecured creditor is an inter-company fee of £967,000 due to Dawnfresh Seafood.
The report adds: “It is currently estimated that, subject to costs, a dividend may be available to unsecured creditors in due course.”
Dawnfresh was one of the UK’s largest producers of fish and seafood. It produced 10,000 tonnes of seafood a year across 350 product lines.
In its most recent accounts, for the year ending March 2020, Dawnfresh Holdings showed turnover of £72.4m and a pre-tax loss of £5.8m.
The company has lost money in each of the last 16 years. The cumulative pretax losses total more than £80m.