Businesses and workers lost millions from Midas collapse
Collapsed construction company Midas, behind several key projects in Gloucestershire, including new student accommodation in Gloucester, owes more than £19million to more than 1,400 companies.
The extent of the losses suffered by Midas’ contractors and suppliers is laid bare in the directors’ report. Nearly 40 companies owe six-figure sums to the construction company which went bankrupt in January. One is expected close to £600,000.
Administrators Teneo Financial Advisory have warned that nearly 1,800 unsecured creditors will not receive a penny. Only Lloyds, the company’s bank, is ready to be reimbursed.
Midas was building student accommodation for Hartpury University and Hartpury College in Gloucester, which were due to open this summer.
Developed by Cityheart Limited, the Blackfriars Residence project had its closing ceremony in December. There is still no official comment from the University.
The directors’ report says the Exeter-based company left total debts of £22.5million after suffering a “rapid deterioration” in trade after November 2021.
A concrete framing contractor is said to face a loss of over £625,000, with several others owing over £300,000.
The report said Midas, which employed 365 people, “was severely impacted by the pandemic in FY20, resulting in periods of business closure and adjusted operating conditions upon reopening. “.
The group also faced inflationary pressures within its cost base, including higher labor and material costs.
Midas brought in financial consultants Deloitte in November ahead of a possible sale, but there was no interest and its bank, Lloyds, then failed to renew a £5million overdraft, triggering the final collapse of the company.
As Midas’ sole secured creditor, Lloyds will get the £1.3million owed to it. Meanwhile, 44 Midas Group employees, who are secured creditors, are in the line for £91,000, in missing wages, holiday pay and pensions.
But other workers, mostly in the construction part of the business, who owed nearly £400,000 in wages, are being warned they may get nothing.