Bradley debt to Solar 21 in arrears

Renewables firm Solar 21 is in discussion with its former CEO Michael Bradley about the ability of his investment brokerage to repay an outstanding debt of €75,000 that is in arrears.

The outstanding debt owed by Bradley’s company Clear Financial to a Solar 21 group company is detailed in a new report by Alvarez & Marsal, a London-based professional services firm that is supervising the High Court-sanctioned restructuring of Solar 21.

Bradley resigned as CEO of Solar 21 last November as a condition of the restructuring.

The new report to investors outlines in detail progress on a number of matters, but also lists the delays, additional costs and disputes with suppliers that are hampering Solar 21’s plan to sell its assets.

The assets need to be sold in order to repay thousands of Irish investors who invested as much as €300m in Solar 21.

The report says it has used “its reasonable endeavours” to collect third-party debts. It provides details of the outstanding debt owed by Bradley’s Central Bank-regulated investment firm MC Planning Limited, but does not say what the debt relates to.

MC Planning trades from a base in Rathcoole as Clear Financial and was a major seller of unregulated Solar 21 loan notes. It is otherwise entirely separate to the renewables investment firm.

“We have reviewed an aged debtors’ ledger dated January 31, 2024, and noted that £75,000 is owed to Solar Clear Limited from MB Planning Limited, with the majority being more than 90 days in arrears,” said the report.

“Management states that it is in discussion with Clear Financial regarding its ability to pay the

debt and it expects payments to resume in the next six months,” said the update.

The progress of the restructuring and asset sale process, as outlined in the report, is likely to cause some concern to investors who hope that they ultimately get repaid as much as 80pc of what they loaned to Solar 21.

That is dependent upon the sale of a number of renewable power plants that were either built or were being planned by Solar 21. The key plant – which Solar believes can be sold for more than £100m – is the Tansterne Biomass Plant in East Yorkshire.

The “challenges with recommissioning and future financing” of Tansterne “may have a significant impact on both the timing and quantum of the return to the scheme investors,” said the report.

That plant is still not working and a subcontractor has been brought in to fix it, with a view to putting it on the market as an operational plant. But the work is now paused and the Sunday Independent has learned that staff brought in to fix the plant are now facing redundancy.

In its latest update report, Alvarez & Marsal outlined how, in the High Court-sanctioned scheme of arrangement, €7m in total had been allocated to the recommissioning of Tansterne.

According to the new report, €11.2m has already been provided to the recommissioning – with £10.8m of that already spent – and the plant is still not operational.

GB-Bio, the Solar 21 subsidiary that operates the plant, is “working through some informal disputes with suppliers, and is making progress towards resolution.”

By mid-February, GB-Bio had liabilities of £2.9m owed to third-party creditors but was disputing £2.1m of that.

“Where management has concerns about suppliers in relation to their performance and cost, management states it is in active discussions with potential alternative providers,” it added.

“Management expects commercial deals will be reached that will result in a portion of these invoices being cancelled,” it said, but it added that up to £1.2m would be required to fund the plant during the period that remediation work was paused and a further £2m would be required once the repairs are completed to commence operations.

For now, the group is awaiting the delivery of “critical spares” and “has insufficient funding to continue”.

“Management is currently considering its options, including raising new finance to complete the work,” said the report.

Solar 21 previously told the High Court that in June 2023 a party made an indicative offer to purchase the Tansterne Biomass Plant for £116.9m, subject to due diligence.

“We understand that management has requested that the potential purchaser provides an updated written offer and draft heads of terms,” said the new report to investors.

EY has been engaged as lead sales advisor for the Tansterne plant since late 2022 and draft sales materials and a preliminary model have been started.

“But these have not been finalised, as the asset is not complete/ready for sale. No active marketing of the asset has been undertaken,” said the report.