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BHS unsecured creditors could receive 2p in the pound

Unsecured creditors to SHB Realisations, formerly BHS Limited, could receive between 2p and 8p in the pound, new documents filed by administrators Duff & Phelps show.

BHS on Oxford Street closed

BHS on Oxford Street closed

BHS on Oxford Street shortly after it closed

Non-preferential creditors are owed £48.5m and Duff & Phelps has received claims of £661m to date, which includes the pension scheme at £571m.

It comes as Duff & Phelps said it expects Arcadia will be repaid its secured debt of £35m in full from floating charge realisations. The charge was created on 14 April this year, before BHS entered administration later that month, and was granted in accordance with the agreement for the sale of the entire share capital of BHS Group on 11 March 2015 and the write-off of £215m of intercompany debt due to Arcadia.

The documents reveal that the retailer’s international arm was sold to new company BHS International Limited for £2.5m. A selection of slower moving stock with a cost value of £839,356 was also sold to the new firm for £500,000.

BHS’s remaining stock when it entered administration was valued at a minimum of £31.7m.

The firm made sales of £247m inclusive of VAT between the period 25 April when it entered administration and 28 August when the final stores closed, and the joint administrators expect that the trading period will result in a surplus of about £47m.

The documents underlined that the joint administrators are taking steps to move the company into creditors’ voluntary liquidation by 24 November at the request of the Pension Protection Fund, the largest unsecured creditor.

Duff & Phelps finally highlighted how it has had to increase its fees by £635,163 as a result of the complexity of the BHS case, “the old inadequate BHS systems” and “the challenges of conducting a confidential sales process that was played out in the media”. Its estimated fee is £4.1m but it warned it may have to revisit the fee estimate should matters continue beyond 30 November.

The pensions regulator yesterday stated that the “door remains open” for a deal to be made with Sir Philip Green to settle the BHS pensions deficit. Lesley Titcomb, chief executive of the regulator, told the work and pensions committee: ”We are pursuing the best possible outcome we can secure for them [members of the BHS pension fund] relentlessly.” 

 

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