Britten-Norman’s new owners acquired the business and assets of the troubled UK aircraft manufacturer for a little over £1 million ($1.36 million), newly published documents reveal.
Private equity firm 4D Capital Partners stepped in to save the airframer in March acquiring the assets of five B-N Group companies via a pre-pack administration process. It has promised to inject funding to turn around the business.
Administrators Chris Pole and Will Wright from insolvency firm Interpath Advisory were on 21 March appointed as joint administrators to Britten-Norman, Britten-Norman Aircraft, BN Defence, and BN Daedalus, plus parent company B-N Group.
Following their appointment, the administrators sold 100% of the share capital of Britten-Norman Aerospace – another group company, which until 29 February had traded as BN Aviation – to Shelton Bidco, an investment vehicle established by 4D Capital Partners.
Britten-Norman Aerospace subsequently acquired the business and assets of its sister companies.
In their notice of administrators’ proposals – dated 9 April but just published on the UK’s Companies House register – Pole and Wright disclose that the five businesses were acquired for a total consideration of £1.1 million.
Britten-Norman – the chief revenue generator in the group - accounts for the lion’s share, at £895,010, while B-N Group and BN Defence both commanded a price of £30,000; exact figures for Britten-Norman Aircraft and BN Daedalus have yet to be disclosed. In addition, the new entity acquired US subsidiaries Britten-Norman Inc and BN Aircraft Sales Inc for a “nominal consideration” totaling £10, the report says.
A proportion of the total consideration has been deferred, the report adds.
Interpath had begun working for B-N Group in December 2023 “to advise on the options available” as the scale of the airframer’s financial issues became apparent. Attempts were made to sell the business, starting on 21 December, leading to four firm offers being received by 1 February, three of which were pursued.
4D Capital Partners initially proposed to buy the business on a “solvent” basis – restructuring was to be conducted later - but subsequently withdrew its offer on 29 February “following further due diligence”.
“4D capital remained interested in the opportunity, however, and submitted a revised offer which required the companies entering administration and the transaction taking place on a pre-pack basis,” the document notes.
“By this point, it had also become apparent that the other two offers which were being progressed were not deliverable.”
Interpath traces Britten-Norman’s troubles to the Covid-19 pandemic during which the group “saw a reduction in demand”, alongside subsequent sharp rises in “energy, labour and raw material costs”.
“These factors adversely impacted margins and profitability, and subsequently led to cash challenges, creditor pressure and the build-up of significant liabilities owing to [UK tax authority] HMRC in certain entities within the group.”
Upwards of £4.2 million of the group’s total debt relates to money owed to HMRC, Interpath says. Although there should be a small dividend for secondary creditors of Britten-Norman, the administrators add: “It is, however, highly unlikely that HMRC will recover their indebtedness in full from either the company, or any of the [group] companies.”
Despite trading conditions improving as the world emerged from Covid lockdowns “they did not improve to a level which enabled the group to address the legacy liabilities which were built up”, says the document.
Lloyds Bank is owed £0.5 million through overdraft facilities provided to several group entities, while unsecured trade creditors are owed a combined £2.1 million across the group, the administrators estimate.
The total estimated deficiency at the three companies for which notices of administrators’ proposals have been filed – B-N Group, Britten-Norman and BN Defence – sits at £18.2 million.
