Galloway external creditors owed £17.6m from collapse of business

© DC ThomsonThe Galloway Group factory at Wester Gourdie industrial estate.
The Galloway Group factory at Wester Gourdie industrial estate.

Dundee specialist engineering firm the Galloway Group and its associated firms collapsed owing external creditors £17.6 million.

The amounts are specified in reports filed at Companies House by Galloway’s administrators Ernst & Young.

The overall deficiency run up by the group’s companies is of the order of £30m.

The figure includes secured and several hundred unsecured creditors and covers financial arrangements between companies in the Galloway network.

Ernst & Young said the total debt to external creditors – companies and suppliers outwith the Galloway parent company and its subsidiaries – is £17.6m.

Galloways’ bank HSBC is owed £2.9m and Scottish Enterprise £800,000. They hold floating charges against property to recover the funds they lent.

The employees’ pension scheme is owed £9.4m and unsecured creditors, including local traders and suppliers, are owed £4.2m.

The sum owed to employees for unpaid wages has been put at £300,000.
Galloway companies were involved in the fabrication, design and installation of ductwork.

Customers were across the construction, marine, oil and gas, nuclear and process industries in the UK and abroad.

The firms went into administration in August with the loss of more than 160 jobs at the Wester Gourdie base.

The main firms were Galloway Group, DuctMate and Galloway Holdings, the non-trading parent of the Galloway subsidiaries.

Andrew Davison and Robert Kelly of Ernst & Young’s restructuring team are trying to rescue the firms as going concerns or sell the property and assets to clear the debts.

At the time of the firms’ collapse, Mr Davison said the companies had been loss-making as a result of weak demand in their traditional construction market.

The fall in the oil price and subsequent pressure on the oil and gas sector also impacted on the company.

The directors undertook a number of initiatives to try to counter the setbacks but the pressures of the losses became too great.

Regretting the redundancies, he said the employees were being assisted with claims and advice to help them for the future.

Galloway Group, with a history stretching 140 years, said efforts to raise vital finance to save the operation were significantly impaired.

The high debt burden on the business from previous borrowings and the final salary pension scheme were stated as the reasons.