One company came close to snapping up Ilke Homes for £25m in June, a new administrators’ report has revealed.
Administrators announced that 36 businesses were approached about buying the North Yorkshire-based modular specialist in May and June.
One bid for the company was received that would have seen it sold through a pre-pack administration, subject to it being able to obtain new debt funding from Homes England and a bank.
However, the report by AlixPartners states that the deal broke down when the unnamed bidder “informed the companies that it was unable to progress with its offer”. No further explanation is given in the report.
Two days later, Ilke Homes and related companies Ilke Homes Land and Ilke Homes Holdings filed a notice of intent to appoint administrators. Some 1,058 employees were made redundant when the administration started.
As previously reported on Construction News, Homes England was owed £68m by Ilke when it went under. The new report shows only around £1m is expected to be recovered through the administration process.
A pre-pack administration would have resulted in less being recovered immediately for the government housing body, though it may have been able to reach a more beneficial long-term deal with the new Ilke Homes company.
According to its last published accounts, the offsite specialist turned over £12.7m in the financial year ending 31 March 2021 and made a pre-tax loss of £33.9m.
Incorporated in 2017 to specialise in low-carbon modular housing, Ilke “suffered liquidity constraints largely due to inflationary pressures”, AlixPartners said.
An investment deal with a third party that had been progressing for four months until May “unexpectedly failed” and helped increase the constraints, the report added.
Ilke is one of a string of start-up offsite specialists to run into financial problems in the past two years, a period which also saw the closure of L&G Modular Homes, as well as the administrations of Urban Splash House and Caledonian Modular.
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