Subcontractors of Elements Europe will only receive a fraction of the £8.7m they were owed when the modular construction company entered administration last June.
A progress report by Interpath joint administrators Samuel Birchall and Stephen Absolom showed that they have secured just over £5m from the sale of company assets.
This total included £2.5m from Elements’ bank accounts and £1.5m from the sale of its Camp Hill project stock and modules to CMC Facilities Management.
GS Real Estate Development London purchased the firm’s contract to build a 23-storey hotel and office complex in east London, where Elements was the main contractor, for £100,000.
After paying £3.6m to the administrators for their services and £600,000 to preferential creditors – including employees and HMRC – only £1.4m will remain for unsecured creditors such as supply-chain subcontractors.
At the time of its collapse, Elements Europe owed £8.7m to more than 200 suppliers.
The collapsed contractor’s statement of affairs also showed a £13.6m debt to “other creditors” and £71.8m in shareholder loans, Interpath said.
More funds may be added once the company recovers amounts owed by debtors, pre‑payments and retention reserves, estimated at £11.4m in the statement of affairs.
All 217 staff members have been made redundant, including the 19 employees who were retained to assist the administrators.
Former employees have lodged tribunal claims over the lack of consultation on their redundancies.
The employment tribunal hearing is expected in April 2026, after which any protective awards will be drawn from the ordinary preferential creditors’ pot.
Based on current estimates, the administrators said they expect employees and HMRC secondary preferential creditors to receive all the money they are owed.
“We anticipate that unsecured creditors will receive a dividend, paid during the creditors’ voluntary liquidation,” Birchall and Absolom added.
“The timing and quantum of the distribution is currently uncertain.”
Elements Europe filed for administration in June after it suffered losses of £80.6m over the past three years, due to cost overruns and water ingress defects on its projects.
The Telford-based company was founded in 2005 by the Pickstock Group.
It specialised in modular and bathroom pod solutions for the residential, hotel, student accommodation and healthcare sectors.
In 2020, South Korean construction giant GS Engineering & Construction became the majority owner.
Before it collapsed, Elements Europe acted as main contractor for two projects in east London and Birmingham.
The firm posted a pre-tax loss of £29.5m from turnover of £42m in its most recent annual accounts for the year to 31 December 2023.
Read More
Contributor