O’Keefe Construction’s unsecured creditors are set to lose more than £13million.
The assets of the civilian company were sold to the Byrne Group last month after it breached a company voluntary agreement (CVA).
The measure, which allows insolvent companies to settle their debts with their creditors by agreeing to pay a portion of what they owe them over time, was put in place to prevent O’Keefe from becoming collapse in administration last year.
Some 150 staff have moved to concrete frame specialist Byrne, after O’Keefe was purchased under the deal, worth around £10million.
The former company, O’Keefe Construction (Greenwich Ltd), appointed RSM Restructuring Advisory as directors at the same time.
Byrne has since established two companies, known as O’Keefe Demolition (Byrne Group) Ltd and O’Keefe Construction (Byrne Group).
Its collapse means more than 400 unsecured creditors owe around £13.2million, which administrators have said they are unlikely to receive.
O’Keefe Demolition himself is set to lose £741,000.
Santander Bank, the company’s only secured creditor, will be repaid the £5.7million owed to it.
O’Keefe had managed to pay his creditors over £3.2million in the first months of the CVA, as agreed last year. But “increasing cash constraints” prevented him from making the second payment, which was due at the end of June, according to a report by RSM.
In the 18 months to November 30, 2021, O’Keefe’s net loss soared to more than £12.7 million, according to accounts submitted by the contractor to administrators – compared to a loss of £1.7 million pounds the previous year.
Over the same 18-month period, O’Keefe recorded sales of £69 million. Its turnover for the previous year reached £61.1 million.
Byrne Group Managing Director Michael Byrne said: “Over the past two years we have sought to add both demolition and earthworks to our capabilities.
“The purchase provides greater opportunities for Byrne Group and O’Keefe as it expands our customer base and creates a one-stop shop from demolition to fit-out.”