by The PMA Team
A group of 52 former SFI Group sites being sold by administrator Pricewaterhouse Coopers is likely to raise no more than £2m and possibly as little as £1m, creditors have been told at a meeting in London.
PwC sold 98 SFI sites to Laurel for £80m in June after SFI was placed in administration. The remaining 52 leasehold sites were put on the market through agent David Coffer Lyons.
A total of 34 of the sites have been closed and returned to their landlord after it was decided they had no commercial value.
The remaining 18 sites are being sold for an average of less than £100,000 each. Offers have been received on all 18 with four actually sold.
Administrator David Chubb said: 'The overall numbers generated are considerably more than many would have thought possible for a leasehold portfolio. The sites, being sold through David Coffer Lyons, carry the spectre of not being taken by Laurel.
'The majority of these sites are marginal, but it would have meant a horrendous cost for SFI to close them.
'It was very difficult to raise the finance to close them. They had an average of 15 employees each and SFI would have had to extract itself from the lease.
'At a profit and loss level, SFI was still losing considerable money (prior to administration) because it had a mountain of debt to service.
Chubb said the biggest difficulty for SFI had been finding the capital required to invest in its leasehold estate in the past two years.
'The debt trading type of company who owned parts of SFI weren't interested in investing further capital. SFI's sites require investment every three years or so to continue getting people through the door.
The creditors' meeting was attended by around 30 of the 7,500 shareholders and creditors invited to attend.
Chubb said: 'The meeting was calm and there were a lot of good questions. Shareholders were pretty pragmatic; one question was about when the tax office would accept this situation in allowance terms.
On the plight of SFI shareholders, Chubb added: 'Not enough shareholders recognise the risk they take on when they buy shares.
'There's no such thing as a sure buck. There's always going to be a number of companies who fail to make the grade.