Environcom acquires debt-stricken rival Overton

By Will Date

WEEE reprocessing firm Overton Recycling has been bought by rival company Environcom, after financial difficulties saw the firm face being wound up by administrators.

The company was placed into administration in November 2013, after a sharp decline in income saw it post a loss of 943,000 for the six months to August 2013.

Overton Recycling's Dudley facility includes fridge processing machinery
Overton Recycling’s Dudley facility includes fridge processing machinery

Overton, which ran a 40,000 tonnes per year capacity recycling plant in the town of Lye, near Dudley, processed waste electrical items from household and commercial sources.
Insolvency firm FRP Advisory oversaw the deal, which Environcom claims will save around 50 Overton staff from redundancy.

Administrators estimated the company and its assets to be worth a total of 457,797. Assets owned by Overton include its fridge recycling machine, valued at around 230,606, and a WEEE machine valued at 105,634.

Losses

Documents published by the administrator reveal that the firm encountered trading difficulties throughout 2013 with turnover falling from around 260,000 in early 2013, to around 155,000 by October. This followed a loss of around 701,000 posted in the 12 months to March 2013.

Overton filed a Company Voluntary Arrangement (CVA) a legally binding debt repayment agreement in August with debts totalling 683,592 owed to creditors, including a total of 317,359 owed to Her Majestys Revenue & Customs (HMRC).

Founder of the firm Dean Overton is also listed as being owed a total of 18,352 by the company, while DSO Estates, a company set up in June 2013 of which Mr Overton is a director, is owed a total of 48,016.

Under the Arrangement, Overton agreed to make monthly contributions of 5,000 per month out of its trading profits to service the debts, generating an estimated return of 22p in the pound for its creditors.

Contract

The company lost a contract with Coca-Cola as a direct result of entering the CVA process, which also contributed to the falling income. Due to a lack of available funds the CVA was ended in November, and Overton was placed into administration.

Five parties, including Environcom, registered an interest in buying the company or some of its assets, but administrators noted that due to Overtons financial position, a combined sale of the business and its assets would be the only viable option.

As a result of the deal, Overton will now be run under the EnvironCom brand. EnvironCom said that the transition will not disrupt operations at the Lye facility.

Chief executive of Environcom, Sean Feeney, said: Were delighted to have acquired Overton Recycling which will not only increase Environcoms processing capacity, but will also secure key recycling jobs in the industry. Were looking forward to bringing it into the Environcom fold and becoming part of our philosophy to do the right thing with WEEE so it doesnt cost the earth.

Related Links

Environcom

EnvironCom operates a 10 million WEEE recycling and reuse facility in Grantham, which has the capacity to process up to 100,000 tonnes of WEEE a year including large domestic appliances, mixed WEEE and cathode ray tubes (CRTs).

The company also operates a 10,000 tonnes per year reuse-only facility in Edmonton, North London.

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