A modular specialist owned by ISG’s parent firm Cathexis owed £70m to the supply chain went it went under days after ISG’s collapse.
ESS Modular appointed administrators four days after ISG’s subsidiaries called in Ernst & Young (EY) to administer its affairs.
EY was also appointed to lead ESS Modular’s administration process.
In a progress report to 22 March, published on Companies House yesterday (15 April), the administrators revealed that ESS Modular owed around £70m to the supply chain when it collapsed.
It is unclear how much the supply chain will receive from the administration process.
However, EY said it “anticipates that there will be sufficient funds available to enable a distribution to be made” to the unsecured creditors.
EY also revealed that it had received “expressions of interest” from other firms to buy ESS Modular after it was appointed to lead the administration.
But those negotiations broke down, and EY said it had not received any further interest since.
All of ESS Modular’s 100 staff have been made redundant.
The firm’s administration is set to last at least 18 months in total after EY applied to extend the process by six months to March 2026.
That will give it more time to chase an estimated £8.9m worth of debts owed to ESS Modular, it said. So far, it has recovered £164,300.
EY is also considering whether to continue a number of claims against third parties that ESS Modular launched before it collapsed.
These claims, the administrators said, were “in relation to subcontractor underperformance/defects”.
Hull-based ESS Modular – which traded as Extraspace Solutions (UK) – posted a pre-tax loss of £15.4m from revenue of £31.5m in its most recent full-year accounts for the year to 30 June 2022.
It was placed into administration on 23 September last year alongside its fully owned subsidiary Spatial Initiative.
ESS Modular experienced “significant losses” on legacy contracts, which caused “severe liquidity pressures”, EY said last year after it was appointed.
It added that shareholder funding had alleviated cashflow pressures until that point, but ESS Modular needed more cash funding to continue to trade.
The modular specialist was part of former ISG owner Cathexis’ portfolio. It rebranded from Extraspace Solutions to ESS Modular in 2019 and acquired Spatial Initiative in 2020.
Companies House lists ISG chair Matt Roche as a director of Extraspace Solutions and Spatial Initiative.
Roche also lists himself as operating partner at Cathexis on his LinkedIn profile.
English