Struggling wholesaler Abra Wholesale has been bought by rival operator Leo Worldwide Supply’s (LWS) for £360,000.
On 3 May, Philip Lewis Armstrong and Philip James Watkins were appointed as administrators for the north London-based cash-and-carry business. According to the administration report published on 26 May, FRP Advisory was appointed to market Abra as a going concern, with 396 parties showing interest. Better Retailing understands one of these parties was a national wholesaler.
Only three companies eventually placed offers. These were CN Foods Distributors Limited, with an offer of £101,000, alongside LWS and Forrest Fresh Foods, which separately put in initial offers of more than £200,000 each.
Although Forrest Fresh Foods was successful with a final offer of £385,000, the company eventually withdrew, allowing LWS to purchase Abra’s business and assets for a revised bid of £360,000.
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The report stated: “The proposed purchaser is LWS, who are not a connected party. LWS is a competitor to the company within the cash-and-carry industry and known to the directors.”
In a timeline detailing how Abra went into administration, the report stated a large investment made into its restaurateur business had “failed after being significantly impacted by Covid-19”.
It stated: “During 2019 and 2020, the company made significant investments in two connected party companies, ABR Restaurant and Grodx, in an attempt to grow the company business and diversify its portfolio. ABR was set up as a family-run restaurant while Grodx started to provide an online facility for its retail customers.
“The failure of this investment resulted in a balance of £1.23m being written off. As a result of these failed investments, the company began to experience major cash-flow difficulties as its working capital requirements increased.”
Abra’s lender, HSBC, had also reduced its trade loan facility from £3m to £1.5m, impacting its ability to source additional funding. Auditors who visited Abra on 4 April noted a “significant proportion of the stock was significantly aged”. This stock was written off.
In total, Abra owed more than £6.1m to 195 creditors, with the largest debt of nearly £2m owed to HSBC. The next largest sums of debt were with the major tobacco companies, with JTI owed £548,636, BAT owed £308,469, Philip Morris owed £223,807 and Imperial owed £64,290.
Other notable creditors include Red Bull (£169,403), Diageo (£119,795), Ferrero (£32,452), Heinz (£98,150), Morrisons (£38,568) and Bestway (£8,229).
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