Tech firm hopeful of completing sale by end of month

THE debts of Bangor firm Gaia Technologies have been revealed as administrators hope to complete a sale by the end of the month.

The tech firm was started up on Parc Menai more than 25 years ago and had grown rapidly in recent years – employing 150 staff.

But the provider of ICT technology, products and services – supplying hundreds of schools, colleges and universities – went into administration in August due to cash flow issues.

The business has continued to trade – although 11 staff have been made redundant.

Now administrators FRP Advisory LLP have released a report outlining what went wrong and their proposals.

It also reveals there have been six offers for the business and assets with the aim to agree a sale by the end of October.

The report shows that there are debts of £5.7m to unsecured creditors – with more than 200 companies owed money.

Scores of unsecured creditors are expected to be left out of pocket.

There is a £451,000 mortgage with Bank of Scotland and £1.23m owed to Lloyds TSB. As secured creditors they are first in line to receive money from the sale of the business.

Staff are also owed £110,830 for pay arrears (in reference to staff who have left) – accrued holiday and outstanding pension contributions. It is unknown if there will be sufficient asset realisations to enable a distribution to workers.

The report also outlines what went wrong with the business which had seen turnover grow from £16m a year in 2015 to £19m in 2018.

It said that many contracts that were secured were “working capital intensive” with significant outlay to deliver.

This saw them build up debt and while growth appeared strong in 2019 the company’s profitability was insufficient to service its debt obligations.

Close Leasing – with which Gaia had built up £1m in arrears – introduced management to FRP with a view of completing a review of the firm’s financial position. However “insufficient information” was made available to complete the review according to FRP.

Tax chiefs at HMRC also issued a winding up order over £866K in unpaid taxes.

Close then made an application to the High Court for administrators to be appointed, and this was granted on August 16.

It is now hoped a sale can be completed to secure the remaining jobs at the business.