TEG Group announced last month that it had been exploring the sale of its operating division, after admitting that it was ‘unlikely’ to secure future funding for the business. It has now confirmed that no further funding could be secured, and has taken the decision to place itself into administration.
This followed problems relating to the cost of the conclusion of its Greater Manchester waste contract, which contributed to losses of around £2.5 million for 2013 (see letsrecycle.com story).
In a statement released on Friday (December 19), the company stated: “Further to the announcement made on 25 October 2014, the Board announces that it has been unable to secure further funding for the Group. As a result, and following discussions with the Group’s senior lenders, the Board has decided that it must now place The TEG Group PLC into administration.”
Daniel Smith and William Dawson of Deloitte LLP have been appointed joint administrators of the business and its subsidiaries TEG Environmental and TEG Energy.
Operations
The firm’s core sites, including its flagship anaerobic digestion plant at Dagenham, are continuing to operate, the company has confirmed, while the administrators explore the potential for the sale of these operations.
The administrators have already concluded a deal for the sale of Simpro – the composting business acquired by TEG in 2010 for around £6 million – to Veolia.
Simpro’s six composting sites, all located in the West Midlands, as well as the firm’s ten-strong workforce have all been transferred to Veolia. The firm has said that there will be no interruption to its operation as a result of the transaction. Simpro has composting contracts with a number of local authorities including Nottingham city council.
Veolia already owns eight composting sites, primarily in the South East of the country including Rainham, East Sussex and Hampshire, producing the firm’s ‘Pro-Grow’ soil conditioner.
The sites involved in the Simpro deal include those at Acton, Oxton, Berkswell, Coven, Telford and Gaydon.
Commenting on the acquisition, Gavin Graveson, Veolia’s chief operating officer, public and commercial in the UK, said: “This acquisition is in line with our core circular economy strategy to manufacture green products and extends our composting network to 14 sites across the UK. We are delighted to strengthen our position in this market place and offer an extended range of services to our customers in the Midlands.”
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