In December 2014 German investment firm Aurelius moved in to acquire the plant and equipment used by Eco Plastics Ltd for around £7.9 million from equipment provider Close Lease Limited, after the bottle recycler had been placed into administration.
As a result of the deal a new separate company trading as Plastics ECO Ltd was set up by Aurelius to take over Eco’s Hemswell plastic bottle recycling facility in Lincolnshire. The company now trades as Ecoplastics Recycling Ltd.
Administrators
The old company, Eco Plastics Ltd, was put into liquidation by its administrators Grant Thornton LLP at the end of September 2015, with total debts of around £14.3 million.
A final financial report published last week by Grant Thornton suggests that unsecured creditors are expected to receive a dividend of around 2p for every £1 owed, representing a total return of close to £280,000 on the overall £14.3 million debt.
Among those to have lost out as a result of Eco Plastics’ collapse are waste management companies, some of whom are owed close to £1 million, as well as local authorities – with around £167,000 owed to seven councils. Other creditors include equipment suppliers and the Environment Agency.
WRAP
The collapse of the company also saw WRAP write off a £1.65 million loan to Eco Plastics, which it had invested through its ‘Accelerating Growth’ and ‘Mixed Plastics’ loan funds in 2012. The money was used to increase the capacity of the state-of-the-art bottle recycling plant to handle an additional 15,000 tonnes of plastic packaging, taking its overall capacity to over 150,000 tonnes.
According to the documents published by Grant Thornton, WRAP restructured its debt to take an equity stake in the new entity – but will still have a right to claim back some of the outstanding loan money as an unsecured creditor.
Eco Plastics made a loss of nearly £12.5 million in the two years leading up to the sale of its business to investor Aurelius in December – losing £5 million in the year up to December 29 2013, and additional £7.5 million in the following 11 months to November 30 2014.
Problems at the company were blamed on a reduction in forecast demand for the company’s rPET product from Coca Cola Enterprises and a fall in commodity market prices and PRN prices.
The new company has restructured its buying strategy, scaling down its purchase of mixed bottles and instead focusing on bringing a greater tonnage of clear PET bottles into its 150,000 tonnes per year capacity recycling plant.
Short
And, the demise of Eco Plastics saw a number of the key figures in the original business depart, including founder Jonathan Short, former commercial director Duncan Oakes and technical director Simon Faulkner, who all left early in 2015 (see letsrecycle.com story).
Mr Short is now an advisor to the Advisory Committee on Plastics and the founding director of Plastics Reclamation based in Newcastle upon Tyne while Duncan Oakes has recently joined Harrogate-based Clearpoint Recycling. Simon Faulkner is now a consultant.
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