Collapsed bus firm GHA Coaches in debts of £5.3 million
Creditors of collapsed transport business GHA Coaches are owed £5.3 million – but stand to receive only 5p for every pound owed, a new report has shown.
The company, which ran bus routes in Shropshire and Mid Wales, collapsed earlier this year.
Today a report from its administrators Grant Thornton has laid bare the depth of the financial crisis which hit the company. In total, creditors are owed £5.276m from the company, with the taxman alone due almost £1m.
But only £241,860 will be available to divide between its unsecured creditors, meaning they will receive only a tiny proportion of the money they are owed.
In a report the administrators said: "The current outcome statement, before costs, indicates unsecured creditors will receive a dividend of the order of 5p in the pound."
Banks, as secured creditors, will receive a larger proportion of the money they are owed, but even they are likely to face a shortfall.
The report also describes how the company's collapse came about.
Having already extended its funding with HSBC in 2013, 14 and 15, the bank and Grant Thornton were asked in March this year to look at providing support as GHA suffered from trading losses, the end of rebates for fuel, and the repayment of financing against its vehicles.
By April a restructuring programme had already seen GHA reduced in size.
It had also asked HMRC to defer some of its debts, but the taxman refused and imposed a winding-up petition which led HSBC to freeze its bank account in early July.
When its council customers denied it £1.5m of funding which it had requested, the company was plunged into administration.
The brothers behind the firm, Gareth and Arwyn Lloyd-Davies, have been disqualified from running bus companies after being found to have had a "catalogue of management failures" before the firm fell into administration.
The coach company's collapse resulted in the loss of 320 jobs. A total of 11 routes were left without service.
The company is currently subject to an ongoing public inquiry. The hearing in Welshpool was told coaches were in such a bad state of repair that a wheel fell of a service carrying schoolchildren.
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