Significant shortfall reported in Discovery Shipyard liquidation

The full extent of the financial situation at Discovery Shipyard Ltd has been made known by the recently issued ‘Statement of Affairs’ report filed with the UK’s Companies House business register by Neil Gostelow and Stephen Absolom, the joint liquidators with Interpath Advisory.

In the report it is shown that the estimated total deficiency for the company trade creditors totals -£5,893,386. Against this, the estimated total assets available for preferential creditors is £4,052.

The amount owing to the 77 preferential employee creditors is £112,719 and that owing to secondary preferential creditors such as HMRC (Her Majesty’s Revenue & Customs) is £605,020.

Looking at asset valuations associated with the fixed charge held by Binti Holding GmbH, Discovery had a book value of £668,801 and comprised intangible assets such as moulds, plant and machinery and IT equipment. The estimated value to be raised from these was a mere £8,000, according to the ‘Statement of Affairs’ report.

The amount shown as owing to Binti Marine Holdings Ltd, the UK subsidiary of Binti Holdings GmbH which was the holding company for Discovery Shipyard, was £2,508,245. The second largest creditor was Discovery Yacht Group Sales, a sister company of Discovery Shipyard under the Binti ownership, which was owed £442,184.

Others among the list of trade creditors were some well-known businesses such as Dixon Yacht Design, Lymington Yacht Haven, Lewmar and Selden Masts to name a few.

Binti Holdings acquired Discovery Shipyard in 2019 out of a previous administration and it took out a fixed charge on the assets.

In its initial statement about the Discovery Shipyard liquidation, Interpath Advsory pointed to the company experiencing a declining order book as a result of the onset of the Covid-19 pandemic.

It added: “Despite new orders coming in during 2021, the company was then restricted in its ability to manufacture to schedule by a combination of the ending of certain government support schemes and the well-documented global supply chain issues which caused delays in the availability of building materials, coupled with wider constraints on working capital. As a result, the company failed to meet the projections in the business plan.”