Norfolk poultry firm had £40m debts before sale

Chickens.
British Poultry

.

Banham Poultry had been in business since 1965 in Attleborough

A poultry firm collapsed last month with debts of £40m, the BBC can reveal.

The Norfolk company, which supplied chicken to Morrisons and Aldi, was sold in a deal which safeguarded 1,000 jobs at its Attleborough factory.

But hundreds of suppliers are owed millions with little hope of repayment.

Banham Poultry was bought out of administration by Chesterfield Poultry of Derbyshire in pre-pack deal where a buyer is lined up before a company becomes insolvent.

Two workers died in a suspected chemical spill at the Attleborough factory when it was put up for sale.

.

A former Banham Poultry truck leaving the Norfolk factory

A creditors’ report by the accountants Duff & Phelps said Banham had a total debt of £40m, owed to about 700 companies and organisations.

Lloyds Bank is owed £19.7m but is in line to be repaid £9m, according to the report.

It also found that trade creditors, which include chicken hatcheries, cleaning firms, transport companies and recruitment agencies, are owed £15m.

The company pension fund is owed £5,095m.

Trade creditors are likely to be repaid only four pence for every pound they are owed, according the administrators.

One farmer, who wanted to remain anonymous, told the BBC he had supplied chicks to Banham for many years.

He was owed “hundreds of thousands of pounds” and was expecting to receive “virtually nothing” from the administrators.

“The news [about Banham] came out of the blue,” he said. “It’s a big blow but we will have to try and trade our way out of it.”

Like other creditors, he is continuing to supply the new owner of the business.

Chesterfield Poultry bought Banham for about £7m.

The deal was welcomed in Attleborough because it preserved jobs and kept the supply chain intact.

However, it is now clear that companies in that supply chain are taking a big financial hit.

.

The company was bought by Chesterfield Poultry last month

Banham had a turnover of about £150m a year and processed more than a million chickens per week.

It accounted for about 7% of the UK poultry market.

Joint administrator Allan Graham said: “The business faced a perfect storm, with increasing margin pressures from supermarket chains as a result of price competition, combined with increases in feed prices.

“It had been undertaking a number of capital projects designed to improve productivity in the longer term but these have impacted short-term profitability.”

Efforts have been made to contact Chesterfield Poultry about the deal.