Finance

'Biological incident' part of the reason for Dawnfresh collapse


A ‘biological incident’ has been listed as one of the reasons behind the collapse of Dawnfresh Seafoods last month.

Founded in 1973, the business operated seven fish farms across Northern Ireland and Scotland, with production and processing facilities in Uddingston and Arbroath.

The company supplied a range of retail, wholesale, food service and export market clients with services from fish processing and supply through to branded products such as RR Spink & Sons and Loch Etive.

A deal to sell its Arbroath facility to Lossie Seafoods, a subsidiary of Associated Seafoods, helped save nearly 250 jobs, but 200 workers at the Uddingston facility were made redundant.

The administrators’ report filed by FRP Advisory at Companies House explained that the firm was approached by the board in November last year to carry out a review.

“They considered either a sale of the Uddingston site and merger of operations with its facility in Arbroath,” the document noted.

Operations had been hit by a “biological incident in Dawnfresh Farming, a weakened trading position in the company and increased costs of merging facilities”.

FRP did not respond to a request for comment on the nature of the incident.

The report detailed that £10m funding would have been required for the business to continue until August this year, but investment “at this level” was not made available.

An accelerated sale process was therefore initiated for Dawnfresh and RRSS Realisations.



Dawnfresh in Uddingston
Dawnfresh Seafoods’ site in Uddingston

The group had previously acquired the former Perimax building beside its site at Kirkton Industrial Estate, with plans for a £5m investment in the premises.

However, that building is now set to be auctioned off on 4 May.

Administrators also laid out the fact that the group has insufficient property to pay unsecured creditors, with Bank of Scotland holding a floating charge over its assets.

“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,” the report stated.

HM Revenue & Customs is listed as a secondary preferential creditor, while the only unsecured creditor is an inter-company fee of £967,000.

The report added: “It is currently estimated that, subject to costs, a dividend may be available to unsecured creditors in due course.”

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, with cumulative pre-tax losses totalling more than £80m.

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