FRP Advisory brought in for administration of grain trader
FRP Advisory has been appointed to the administration of Scotland based grain supplier Alexander Inglis & Son, in a move which is expected to impact hundreds of growers throughout the UK’s north. As unsecured creditors, farmers will be behind the firm’s prime lender, and the government when it comes to compensation, despite some being owed thousands of pounds.
Alexander Inglis & Son is a long-established independent merchant of cereals. Founded in 1950, it since became one of the UK’s leading suppliers of grain and cereals to the whisky and distilling industries. Most recently run by former Scotland national rugby captain James Aitken, it operates five grain stores across East Scotland and the Borders area, with a turnover of around £100 million and 40 staff.
Scotland’s grain industry has been suffering from economic uncertainty over recent years, however, with a number of distributors falling into insolvency. As a result, while Alexander Inglis & Son suffered from weaker trading in recent months, following a poor harvest in 2020 and a contraction in demand stemming from the Covid-19 pandemic, its fate seems to have been sealed by the ongoing impact of legacy losses on dealings with the failed Philip Wilson Group.
The crisis deepened in mid-May, and as such the board determined that the best course of action was to wind the business down to maximise value to creditors. The appointment of Tom MacLennan and Chad Griffin as joint administrators saw the FRP Advisory Partners tasked with confirming title to stock held in the stores, and to the extent owned by third parties, liaising with owners on stock disposals. Meanwhile, the business’ owned grain stores and plant and equipment marketed for sale.
Griffin said, "The storage facilities are very well equipped and in strategic locations - we will now focus on marketing the assets for sale."
Formed in 2010, FRP is a business consultancy based in the UK, which provides restructuring, corporate finance, debt advisory, forensic accounting and pensions services to clients across the country. FRP is well versed in running administrations in the Scottish cereals industry. In 2018, for example, the consultancy took on the sale of Angus Cereals, a farming co-operative has been left hanging in the balance, with administrators rushing to find a buyer ahead of the year’s cereal harvest.
Supply chain concerns
According to industry news service Farmers Weekly, the news leaves a number of grain producers exposed to losses across the UK. As the administration process will list farmers as unsecured creditors, they will only be in line for a potential pay-out after government agencies and secured creditors, like principal lender Macquarie Bank.
Growers worked with the collapsed firm across many regions, including Aberdeenshire, Angus, East Lothian, the Borders and Northern England, are affected. Meanwhile, although the publication could not confirm exact numbers, it noted that “advisers expect it to run to hundreds of growers.” Pointing to Morpeth, Northumberland, for example, Farmers Weekly quoted NFU group secretary Stephen Rank, who “knew of about 20 farmers affected in his area, as well as others in the NFU Alnwick catchment, with some farmers owed up to £100,000.”
NFU Scotland Policy Manager David Michie additionally told Farmers Weekly there were “wider concerns,” as some farmers had contracts with other traders “who, in turn, had contracts with Inglis.” He concluded that “in the longer term we are concerned about supply chain resilience and there being fewer larger buyers.”
