£29m owed to unsecured creditors by Mona Dairy

More than a dozen farmers have been left owed tens of thousands of pounds each after Anglesey-based milk processor Mona Dairy went into administration earlier this year.

Businesses owed money by Mona Dairy are unlikely to see much, if any, of it returned, according to an administrators report.

The administrators, FRP Advisory, said: “It is currently estimated that there will not be sufficient funds available to make a distribution to unsecured creditors.”

See also: Anglesey-based dairy plant falls into administration

Farmers, agricultural societies, and levy boards were all included as creditors in a statement of administrator’s proposal, published on Companies House.

More than 200 potential creditors were identified with a total of £37.1m owed, of which unsecured creditors accounted for £29m.

Mona Dairy was supplied by dairy farmers across north Wales and England, and more than £20m had been invested for the construction of its site, including a £3m grant from the Welsh government.

Priority creditors are expected to be repaid.

Redundancies 

Mona Dairy had been employing 48 members of staff when the company ceased trading.

40 staff were made redundant either immediately or shortly after administrators were appointed, and were advised to submit claims to the Redundancy Payments Service.

Outstanding payments of £42,000 for holiday pay, overtime, and unpaid pension payments are owed to employees as preferential creditors.

Company structure

Mona Dairy Group was made up of three companies, all of which had the same two directors – Roelf Jan Akkerman and David Wynne-Finch.

Different Dairy was the parent company while operations took place at Mona Island Dairy, and a third company, Wynne-Finch Farms, covered property.

David Wynne-Finch had funded much of the business initially, and it was then subsequently funded by secured debt provided by Dairy Investments and Klooster, according to the administrators.

When the company entered administration, Dairy Investments was owed £6.78m, while Klooster was owed £1.062m, both of which were secured by fixed charges to assets.

Properties 

In April, prior to the business going into administration, properties were transferred outside of the group to a separate company owned by Roelf Jan Akkerman.

The company then released a statement in May advising that it had failed to source sufficient short-term funding from its stakeholders.

Following this announcement, the administrators said the business faced mounting creditor pressure, particularly from local farmers.

It said: “Given cashflow difficulties, the company was unable to make payments to the farmers for the milk supplied, therefore disrupting their supply chain, leading to an inability to trade.”

Mona Island Dairy entered administration on 7 June, with Different Dairy subsequently being placed into administration on 19 July, by creditor application to court.

Sale of assets

Joint administrators are set to review the transfer of properties between companies in order to “achieve the best outcome for all creditors by seeking to sell the facility as a whole”.

The report suggests that the sales process is ongoing, with discussions progressing with a number of parties interested in the assets of the company.

FRP Advisory said: “Once a sale has been concluded and assets realised, full details will be provided in subsequent reports to creditors.”