Wrekin Construction's debts ran to £21m

Wrekin Construction went to the wall owing almost £21m. The 47-page creditors’ report carries more than 1,000 names of companies and individuals who were left unpaid.

And the infamous ruby? Wrekin’s administrators reckon the £11m-or-not chunk of mineral is such a one-off that experts have been unable to put a proper value on it.

The ruby had first appeared on Wrekin’s book two years ago when David Unwin stepped forward to save the group from the financial muddle racked up by the leadership combination of Simon Frain (former owner and chairman) and John Worthington (chief executive).

Amy Bould, business editor with The Shropshire Star, reports that rescuing Wrekin Construction so it could continue to trade was not an option according to a report to the company’s creditors.

As a result administrators Ernst & Young felt that Wrekin could not be saved as a going concern, leading to the immediate loss of 410 jobs.

“Investigations revealed four main issues which had affected the company’s cashflow and ability to continue to trade,” said the paper.

These were:

its withdrawal from railway work;
a reduction in supplier credit insurance;
a number of key contracts were in dispute which meant multi-million balances were not paid;
an investigation into Wrekin’s £2m investment in acquiring and funding “non-core” businesses.

Much of Wrekin’s plant has been sold by auction – but not all.

The creditors’ report says: “In addition to the assets included in the auction, there remain a small amount of assets held on third party sites with the owners preventing Wrekin Construction access to the site.

“The joint administrators are currently seeking legal advice in order to gain access to those remaining assets.”

The online auction of vehicles realised sales of about £83,000.

The administrators are currently selling Wrekin’s head office in Shifnal. The company was owed about £11m by debtors plus a further £1.7m of non-contract debts.

The creditors’ report shows that Wrekin owed £3.4m in VAT.

The report says: “Upon appointment, we were advised by the directors that the gem was held by an agent of David Unwin, a director of Wrekin Group, located in Saudi Arabia.

“Following numerous conversations, arrangements were made with David Unwin for the item to be returned to Wrekin Construction.”

The report confirms that the 2kg rock is natural corundum, otherwise known as a ruby, which is opaque and not of a good enough quality to be faceted.

The £11m valuation turns out to be a “forged document”.

As of April 27, 2009, nine employees remain with Wrekin Construction to assist with the realisation of the remaining plant and machinery.