Jobs saved as New Earth Solutions finds buyer
The sale to Leeds-based DM Opco has safeguarded the 143 jobs across New Earth Solutions’ five sites and head office in Verwood, Dorset.
Sarah Bell and Philip Duffy, Managing Directors of Duff & Phelps, were appointed as joint administrators to the group and its sister company New Earth Solutions Facilities Management this week after protracted talks with an unnamed plant developer broke down.
According to Companies House records, DM Opco Ltd’s sole director and shareholder is Declan McKelvey. He is listed as an accountant and was appointed a director of Direct Golf UK last October after the golf equipment retailer’s administration was also handled by Duff & Phelps.
New Earth currently manages around 450,000 tonnes of waste a year at its two operational in-vessel composting (IVC) facilities in Sharpness in Gloucestershire and Blaise in Kent, as well as three mechanical biological treatment (MBT) facilities at Avonmouth in Bristol, Cotesbach in Leicestershire and Canford in Dorset. All of these treat waste from both local authority and commercial customers.
This will be welcome news to its local authority suppliers, one of which, the Dorset Waste Partnership, this year doubled the amount of residual waste sent to the Canford site from 25,000 to 40,000 tonnes.
None of the sites themselves had entered administration and all continued operating as normal this week. The business, assets and subsidiaries of the two New Earth Solutions companies will continue to trade as New Earth.
A spokesperson for DM Opco Limited commented: “I look forward to working with the management team and all employees in order to re-establish the business and deliver strong future growth. New ownership has enabled the group to strengthen its balance sheet and it is now fully funded.”
New Earth Solutions administration
In a letter sent to shareholders of the New Earth Premier Fund on Tuesday (7 June), the fund’s Director Michael J. Richardson announced that the group had entered administration after takeover negotiations with an unnamed developer of large combined heat and power (CHP) plants in Europe ended.
Extensive discussions had been taking place with the developer and the fund’s senior lenders, Norddeutsche Landesbank Girozentrale and the Cooperative Bank plc, since October 2014. However, concerns about the group’s contracts to collect municipal solid and organic waste and supply the resulting refuse-derived fuel (RDF), following a sale meant that a deal could not be reached.
An agreement was finally reached, with the developer purchasing the senior debt from the senior lenders, subject to certain conditions being met by the end of May. However, after accounts for the year ending 31 January 2015 were filed, the company was approached by customers threatening to stop taking off-takes if bank guarantees were not given.
The letter explained that senior lenders were not prepared to meet these demands, accelerate payment requests by the RDF customers, or accept the developer’s previous offers of assistance – forcing the New Earth directors to file for administration.