US-based lender FGI Worldwide found several breaches of its £10mn receivables purchase agreement with Aartee Bright Bar before calling in administrators, according to a report from administrators Alvarez and Marsal.
FGI became aware of the breaches in October and December, and found another in January, when it demanded repayment of its outstanding amounts within 10 days from 27 January. No repayment was received from Aartee Bright Bar by this date, according to the report.
The company had explored several refinancing options to help with its funding problems, including a mortgage on its freehold properties, a shareholder supported inter-company loan and a refinancing of its inventory and receivables facilities. None of these efforts were successful, however, and administrators were called in on 6 February.
Metals marketplace Reibus International and its London-registered subsidiary are the largest trade creditors of Aartee Bright Bar, with the companies owed around £8.5mn in total. Reibus financed purchases for the company from Sidenor, Saarstahl, Global Steel and Wire and British Steel, according to the administrator's report.
Reibus hired the previous chief executive officer of Aartee Bright Bar, Gianpiero Repole, in August, and also employed some other Liberty Commodities staff. It then closed its Dubai office, where those staff where based, last month.
Liberty Speciality Steel is owed around £1.2mn, according to the administrator's report. Liberty tried to include Aartee Bright Bar in its acquisition of the wider Aartee Group but it was unsuccessful in challenging the administration, shortly after which the sale to Barrett Steel was completed. Barrett paid £6.4mn for the assets, the administrator said.
Alvarez and Marsal also said a party "connected to the applicant" via a common ultimate beneficial owner proposed a rescue of the company as a going concern and progressed a sale and purchase agreement to an advanced stage, but was unable to "evidence funding or the necessary support of the majority of creditors". Jeff Kabel, Liberty Steel's chief transformation officer, previously said the company had "the right plan to put Aartee Bright Bar on the path to recovery as a solvent going concern, which is supported by the majority of its creditors".
Marble Power, Liberty's energy trading arm, is also a creditor of Aartee Bright Bar.
