June 19 2013 Latest news:
By John Elworthy , The Editor
Friday, May 4, 2012
THE £12million-a-year packaging and soft fruits business that Peter Grice began with £1,000 in 1988 is in tatters – receivers will auction off some assets next week.
But Mr Grice remains confident of bouncing back and told me this week: “I am still dealing with national and international deals to do with packaging materials.
“I am taking legal action over what happened.”
Mr Grice believes he was the victim of ‘swaps and collars’ – financial instruments involving the complexities of interest rates – and it was these, he says, “which brought my business down”.
Even after Tuesday’s sale – by auctioneers Andrews and Robertson – he will still own a number of properties, he says, including the Falcon Hotel in Whittlesey.
The insolvency experts who handled the administration of his business, PG Packaging, also noted it did not involve the main business freehold which is still owned by him.
Mr Grice had expanded PG Packaging massively in recent years having started up at a warehouse in Norfolk before moving to Kingsland Farm, near Coates, in 1996.
He acquired an additional 14,000sq ft of warehousing in Arbroath, whilst Kingsland Farm grew to five warehouses, holding 1,400 pallets and covering 52,000sq ft.
The report prepared by FRP Advisory LLP, after they were appointed joint administrators, point some blame on the acquisition in December 2006 of Central Packaging in Lincolnshire for £3.4million.
The company had a packaging specialty which Mr Grice wanted and to pay for it he used bank debt, earnings and a personal loan.
From 2009-2011, however, turnover at Central Packaging dropped from £5.1million to £2million.
Supermarkets’ resistance to price increases filtered through the supply chain, said the administrators, and several key customers were lost.
In March 2010 the writing was on the wall when the sales director left to set up a rival company, “taking a number of clients away”.
From 2007-2011 the companies lost £550,000 and sales fell from £13million to £10million – partly as a consequence of new legislation on packaging but partly because of the recession.
VAT and Pay As You Earn arrears totalled £401,000 at the time of administration and a loan by Mr Grice to PG Packaging of £819,000 for redeveloping the site and building new units could not be met.
The financial report says NatWest had provided loans totalling £1.45million to PG Packaging – secured against Mr Grice’s personal property portfolio – and a villa he owned in Cyprus attracted a £230,000 loan from the Bank of Cyprus.
The administrators said no-one came forward to buy the businesses, even though there were 17 “expressions of information” and so they were forced to close them with the loss of more than 25 jobs.
Mr Grice, meanwhile, is working hard at other interests: he hopes legal action might follow as early as this summer “and I may be able to talk to you again later in the year”.
UNDER the Law of Property Act 1925, Rosalind Goode and Nathan Pask have told creditors they have been appointed receivers of a number of properties owned by Mr Grice.
These are being offered for sale at an auction in London on Tuesday and include 29,29a,31 and 31a Broad Street, Whittlesey; Gravel House, Elm Road, March; 9 Market Street, Whittlesey.
Documents obtained by the Cambs Times also show Kingsland Farm as being in receivership but this property is not listed on those being auctioned.
The administrators have written to tenants insists all rents and payments are made to them.
The auction will be at Grand Connaught Rooms, Great Queen Street, London.