Rescue plan agreed for Merseyside recycling firm

Merseyside waste and recycling company Environmental Waste Controls (EWC) is set to exit administration after creditors lodged an overwhelming vote of support for a proposed rescue plan.

The company which owes creditors around 4 million entered administration last month due to cash flow difficulties following a number of non-trading cash costs, such as contract losses and litigation costs.

As such, in July 2013 EWC sold a significant contract with Kingston council worth around 790,000 in net proceeds in order to repay bank debt, according to financial documents. Following the sale, EWC operations manager Thomas Crumbleholme is also now on a three-month secondment at Kingston council.

Lee Ross and David Riley of the Manchester office of Grant Thornton were appointed as administrators for EWC and its subsidiary EWC (South London Community Recycling Services) on August 21 2013.

A Company Voluntary Agreement (CVA) was then proposed by Grant Thornton, which today (September 16) announced that the CVA has been accepted by creditors following a meeting last week.

The terms of the CVA, which will allow EWC to continue trading while creditors are paid, have not been disclosed.

Control of the company, which has its headquarters in Knowsley, is now being returned to its director Bill Edwards, who is also the joint owner alongside Julie Ann Edwards.

Les Ross, joint administrator, described the creditors support as overwhelming after over 90% of those voting approved the CVA, subject to the modifications put forward by the creditors.

Mr Ross said: Whilst rescuing a company as a going concern is the first purpose of an administration in the insolvency legislation, it is rare that this can be achieved and it is gratifying for my team to be able to deliver this rescue.

EWC

Established in 2003, EWC employs 267 people at sites across the UK and operates household waste and recycling centres (HWRCs) on behalf of local authorities such as Leicestershire county council.

The South London Waste Partnership (SLP) of Croydon Merton, Sutton and Kingston-upon-Thames borough councils also awarded EWC a contract in 2008 to manage seven HWRCs in the area.

But, according to the administrators, the majority of the companys income comes from waste disposal and facilities management services it provides for the likes of Hilton Hotels UK & Ireland, Liverpool Airport, Network Rail, Morrisons supermarket and the National Health Service (NHS).

It also operates a 600,000 materials recycling facility (MRF) in East Kilbride, Scotland, which opened last year and is capable of processing 100,000 tonnes of waste per year.

In December 2011, EWC lost out to Waste Recycling Group in its bid to operate two HWRCs and a waste transfer station in Neath Port Talbot, South Wales. The sites had previously been operated by EWC on behalf of the county borough council (see letsrecycle.com story).

The company was also awarded damages in January 2010 after Lancashire county council awarded a contract to operate 21 of its 23 HWRCs to SITA UK, after EWC claimed its bid was the cheapest (see letsrecycle.com story).