One of the largest liabilities was a £45.6m “pension scheme deficit excess”, only exceeded by the £60m owed to other companies within the group as part of complex internal financing arrangements.
A summary of Caparo’s assets reveals that it had assets with a book value of £50m available to preferential creditors but these were expected by administrators to realise just £73,000.
Caparo, which was involved in the steel industry, was thought to have been the latest victim of the crisis hitting the sector when the business collapsed in October.
However, the company – started by billionaire Lord Paul more than 50 years ago – was later revealed to have already been struggling, and its troubles were exacerbated by its use of asset-based financing, which involves securing loans against sales invoices. The already difficult trading environment Caparo faced meant the loans the business could raise declined as its sales slipped.
Just not a very well run business in fact.