The amount SMS-Alderley owes creditors after entering administration

Specialised Management Services (SMS)-Alderley, a manufacturer and service provider for the oil and gas industry based in Gorleston, went into administration in July.

Now, it has been revealed that the firm went under owing creditors more than £6m.

Unsecured creditors include local firms like S&G Fabrications, in Lowestoft, which is owed £250,000

READ MORE: Business facing closure after Norfolk firm goes into administration owing it £250,000

SMS-Alderley entered administration on July 24, leading to 87 redundancies. This was 95pc of its workforce, with five employees being retained to assist administrators Grant Thornton. 

SMS-Alderley, based at Starling House, off Lancelot Road, at Gorleston's Beacon Park (Image: Adam Barker) The joint administrators’ statement of proposals for Alderley Plc, Alderley Systems Limited and SMS - all part of the Alderley group in administration - estimated former SMS employees are owed more than £164,000. 

Under ordinary preferential creditors, this figure includes employee wages and salary up to £800 per person, and accrued holiday pay and contributions to occupational pension schemes deducted in the four months prior to the insolvency. 

READ MORE: Rig workers left stranded offshore after Norfolk firm crashed into administration

Secondary preferential creditor claims, which may include HMRC claims for arrears of VAT, sums deducted in respect of PAYE and employees' national insurance contributions, were estimated to be worth more than £402,000.

LATE OFFER 

The report, published on Companies House, revealed an offer was made for SMS two days before the firm entered administration but was later withdrawn.

In June, the board of Alderley and its subsidiaries contacted Grant Thornton about growing cash pressure within the group. 

Grant Thornton was engaged to undertake an Accelerated Merger and Acquisition (AMA) of three businesses in the group, including SMS.

On July 19, directors issued notices of intention to appoint administrators. The offer for SMS was sent directly to the board on July 22, outside of the AMA process.

The party making the offer declined a request to provide funding to meet payroll costs and delay the administration while a solvent sale was explored.

The joint administrators, once appointed, continued a dialogue with the offeror but no feasible offer was received. 

SMS Alderley went into administration on July 24 (Image: Adam Barker)

HISTORY OF SMS

Formed in 1999, SMS manufactured equipment and provided maintenance and installation services for the oil and gas industry, specialising in hydraulic, pneumatic and electrical control systems. 

The company was based at Starling House, a two-storey office and warehouse at Gorleston's Beacon Park. 

Joint administrators have now instructed Savills to market and sell Starling House, which the estate agent has listed with a guide price of £2.5m.

The book value of SMS's plant and machinery is £131,000.

The value of SMS's debtors at the time of the appointment of the joint administrators was around £5m. To date, realisations of around £2m has been achieved.

READ MORE: SMS-Alderley apprentices taken on by another local company

SMS was acquired by its parent company Alderley Plc, based in Gloucestershire, in 2003.

Both Alderley Plc and Alderley Systems Limited entered administration alongside SMS on July 24. 

Alderley was founded in 1989 by Bristol businessman Tony Shepherd, who named the business after his home village, Alderley. Mr Shepherd died in 2020. 

Alderley had bases in the UK, India, Saudi Arabia, Singapore, United Arab Emirates and Qatar.

Estimated unsecured creditors for Alderley Plc and Alderley Systems Limited are £8.89m and £4.19m respectively. 

S&G Fabrications in Lowestoft was one of the local firms owed thousands by SMS (Image: Denise Bradley)

FUTURE OF THE ADMINISTRATIONS 

The administrations are currently due to end on July 23, 2025.

The administrators' first progress report will cover the six months from the date of the administration (July 24), which will be delivered to creditors within one month thereafter. 

It is currently anticipated that secured creditors will be repaid in full and that there will be sufficient funds to enable a distribution the unsecured creditors of both SMS and Alderley Systems Limited - but not Alderley Plc.

The decision date for creditors approval is October 1.