Hundreds out of pocket as Midas debt tops £70m

THE debts of fallen South West construction leviathan Midas continue to mount as it emerged its housing arm alone owes more than £12 million.

An administrators’ report into the dealings of Exeter-headquartered Mi-Space (UK) Ltd show that more than £10 million of claims are unlikely to be paid – meaning the overall Midas deficit is now north of £70 million.

Among more than 350 creditors, mostly small businesses, are companies in Plymouth, Exeter and across the wider UK. The debt even includes £84,457 owed to seven of Mi-Space’s own workers.

Mi-Space was the subsidiary of Midas Group Ltd responsible for building houses and servicing properties. Along with its parent firm and other subsidiaries Midas Construction Ltd, Midas Retail Ltd, Midas Commercial Developments Ltd and Falmouth Developments Ltd, it fell into administration in February 2022. Despite a chunk of the business, Mi-Space Property Services Ltd, being sold via a £230,000 prepackage deal to national property services company Bell Decorating Group Ltd, which has a base in Plymouth, the company’s assets only amount to £2,160,500.

That means that, once preferential creditors are paid, it leaves no money for unsecured creditors and floating charge holders, resulting in an estimated deficit for creditors of £10,481,203.

With recent figures from administrators revealing nearly £70m is being claimed by creditors of the two main Midas companies, Midas Group and Midas Construction, it means that now nearly 2,000 are likely to receive none of the cash they are owed.

And with Mi-Space’s deficit added, it is likely that more than £70m of claims will not be satisfied. Reports from administrators at global business advisory firm Teneo Financial Advisory Ltd show the two main companies in the Midas family – Midas Group and Midas Construction – have realisable assets of just £8,354,644.

With Mi-Space’s assets added, the figure is £10,515,144, but when preferential and secured creditors are paid it means there will be a predicted shortfall of £70,772,107 for nearly 2,000 small firms and individuals in the supply chain of the three companies: Midas Group, Midas Construction and Mi-Space.

This includes £4,662,826 owed to more than 300 workers who were made redundant when the three companies went bust. That is an average of about £15,000 each.

Although headquartered in Exeter, Midas was involved in huge construction projects across the South West and companies owed cash include several in Plymouth. Shortly after Midas went into administration, Bell Group swooped to purchase Mi-Space (UK) Ltd, saving 46 jobs.

However, Bell only purchased the property services section of MiSpace, which specialised in refurbishment and housing upgrades, not the part that actually builds houses.

Bell bought Mi-Space’s goodwill and IP for £15,000, office furniture and IT equipment for £10,000, work in progress for £122,922, and £82,078 in trade debts owed to Mi-Space, which it will look to collect.

When Midas fell into administration in February, it blamed a toxic cocktail of Covid, inflation, money owed to them but not paid, and cash flow problems for causing a financial doomsday.

Tim Jones, chair of the South West Business Council (SWBC), described Midas’s collapse as one of the biggest business failures to hit the region and a major blow for the regional economy.