Farmdrop Limited (08111929): administration
- Status
- Administration ended
- Administration began
- 2021-12-17
- Administrators
- Chris Ferguson
- Administrators' firm
- RMT Accountants & Business Advisors
- Formerly
- The Local Food Movement Limited
- Incorporated
- 2012-06-20
- Location
- Newcastle
- Industry
- 96090 Other service activities n.e.c.
Why it went into administration
- Over-expansion / investment not recovered
- Competition / price pressure
From the administrators' statement
The Directors approached RMT in July 2021 to provide advice on options, should ongoing discussions with investors prove unsuccessful. At that time, the Company had in principle secured significant funding from two of Farmdrop’s existing investors. One of the investors was unable to proceed, which jeopardised the cash flow and proposed expansion plans. No other parties were prepared to invest.
However, after discussions with a leading investor and the secured creditor, subject to obtaining security aver the Company’s assets and agreeing order of priorities, that investor agreed to provide a £3m funding line to the Company to stabilise the cash flow and provide the Company with breathing space to sell the business, or secure further ongoing investment.
On projections prepared by the Company, this enabled trading to continue with no significant change to the supplier creditor profile, through the profitable Christmas trading period to Quarter 1 2022, when it was expected that a sale, if achievable, would complete. The Directors considered that this provided the best outcome for ail creditors.
Administrators' statement of proposals (2022-02-14) · Companies House register