The administrators of Media Square have confirmed to Marketing Services Financial Intelligence that the acquiring company MSQ Partners has paid £11 million for the businesses it has acquired and has paid off the relatively modest amounts due to unsecured creditors of the parent company (see Media Square management buys back group from administrators).
The administrators also confirmed that Lloyds Banking Group will have suffered a substantial loss on its lending that totalled £21.5 million at 31 August prior to recovering £3.25 million from the sale of a Newmarket property.
Most of the group’s creditors are due for payment by individual subsidiaries and currently remain outside the scope of the administration that relates solely to the parent company. According to administrators Pricewaterhouse Coopers, “the individual subsidiaries are unaffected and their creditors will be paid as normal”.
“There are no inter-company balances where subsidiaries owe money to plc”, commented PwC partner Zelf Hussain. “There is no risk of me pursuing the subsidiaries for any balances.”
However, the ability of subsidiaries to settle outstanding debts will depend on the availability of readily realisable assets within those subsidiaries and the capacity of the newly constituted MSQ Partners group to borrow additional funds to satisfy any additional working capital requirements.
It may be some time before it becomes clear whether sufficient capital has been procured to accommodate the ongoing needs of the bought out businesses.
