Merit Industrialised Construction has sprung from the remains of the failed Northumberland group
Newly incorporated Merit Industrialised Construction has taken on certain assets of its failed predecessor.(Image: Merit Industrialised Construction)
The boss of collapsed Northumberland offsite construction specialist Merit has promised a “new chapter” with the launch of a recently created business.
Merit Industrialised Construction Limited has acquired assets from its failed predecessor and has the backing of Modulex Modular Buildings plc, a global player in the modular construction space – itself backed by investors Red Ribbon Asset Management – and HBEM, a specialist maker of advanced manufacturing sites. The business includes some of the leadership team from its forerunner, including founder Tony Wells and chair Kirsty Wells.
Acknowledging the impact of the administration of Merit Group and Merit Holdings on suppliers and others, they say the formation of Merit Industrialised Construction means intellectual property and technical innovation can be “taken forward within a newly capitalised organisation”. Nearly 300 jobs were lost in November when administrators were appointed to several Merit companies.
Mr Wells, CEO of Merit, said: “Merit represents a new chapter. The business has been established with new investment partners, new governance and a refreshed operating model. This structure allows us to build on proven intellectual property while developing new capabilities for the future.”
“The administration of the former businesses was a difficult outcome and resulted in the loss of a significant manufacturing presence in the region. Merit has been created to move forward positively, supported by strategic investment and international opportunity, with a focus on design, manufacturing and delivery excellence.”
Initial equity investment of around £900,000 has gone into the new company from shareholders. In recently published documents, administrators for the Merit group companies set out how a £896,000 deal with Merit Industrialised Construction included customer contracts, some work in progress, plant and equipment and a licence to occupy the Factory 2 site, along with an option to buy the factory when the licence expires for £6.86m.
A report from insolvency specialist Interpath shows Merit Holdings had a total deficiency of more than £25m, with an estimated £16.8m owed to unsecured creditors. Meanwhile, Merit Group Services had an estimated total deficiency of £19.45m, including £9.6m owed to unsecured creditors, and Merit Health Ltd’s statement of affairs shows a total deficiency of £20.38m.
The former Merit HQ is the centre building.(Image: Watling)
Meanwhile the head offices of the former Merit businesses have hit the market as administrators at Interpath look to recoup sums. Agents are now marketing the 8 Silverton Court office building on Cramlington’s Northumberland Business Park. The 10,106 sqft purpose-built property had housed some of Merit’s operation until part of the group’s demise in November.
Advisory firm Watling Real Estate has been brought in by Interpath. They are now looking for interest in the freehold or leasehold of the three-storey office block which occupies a prominent position on the estate.
Rob Cruikshank, associate director at Watling, said: “This is an exciting opportunity to acquire a modern purpose built office building that is prominently positioned at the front of Northumberland Business Park. In recent years the business park has become an established out-of-town office location within the region.
“Our clients are seeking offers for the freehold interest in the office building, and we will also consider offers to acquire the space on a leasehold basis.”
