Headquartered in Bristol U.K., Gulliver’s Truck Hire Ltd was established in 1960 and operated a UK-wide truck hire business with a fleet of approximately 4,500 vehicles available on short and long-term leases. Following difficult trading conditions and significant cash flow difficulties, the directors engaged KPMG to assist the Company to explore available options. Gordon Brothers was also engaged by the company, to provide a desktop valuation of the Gulliver’s fleet, comprising of tractor units, rigid lorries, vans, trailers, sweepers, gritters and other general and specialist vehicles. The directors later appointed David Pike and Mark Orton of KPMG as Joint Administrators of the Company on 18 December 2018. It was not possible to achieve the sale of the business as a going concern, but the Joint Administrators were able to maximise the returns to creditors through negotiating a number of sales of packages of assets.
Gordon Brothers was appointed as agents to help dispose of the remaining assets. The earlier valuation had indicated potential equity in the Mercedes-Benz financed assets – 471 vehicles, consisting of mainly 2013/14 registered Actros tractor units. Gordon Brothers approached the Joint Administrators with a proposal to enable the creditors of the Company to benefit from a share of the equity in the Mercedes-Benz funded assets, which would otherwise not have been available for creditors. As such, Gordon Brothers provided a non-recourse loan to the Joint Administrators in excess of £5m to satisfy the finance agreements with Mercedes-Benz Financial Services. This secured the vehicles as well as provided working capital to help fund the administration.
For Mercedes-Benz, it helped avoid significant costs and resource with locating, collecting and selling their fleet of vehicles, having received the agreement balance in full within 3-days of the administration. The loan was secured against the proceeds of the sale of the Mercedes-Benz vehicles with no risk to the Joint Administrators. There was also an added benefit of a distribution waterfall to share any equity between Gordon Brothers and the administration after repayment of the loan.
Gordon Brothers was then tasked to sell 454 former Mercedes-Benz vehicles and a further 317 unencumbered assets, with a combined Market Value of over £10m. A team of seven worked for three months to locate the vehicles, out on hire to approximately 200 rental customers, offering customers the opportunity to buy the assets or recovering them for sale by private treaty or online auction. A significant number of vehicles were subject to liens, which had to be negotiated and many were non-operational and had to be recovered, repaired and prepared for sale. Alongside the vehicles, Gordon Brothers promptly valued and disposed of garage equipment, vehicle parts and chattel assets held at the seven Gulliver’s depots, providing further significant realisations for creditors, reducing property holding costs, and leaving the freehold premises cleared and ready for sale.
The total vehicle sales achieved was at 100.4% of the original valuation, highlighting its accuracy and the success of the realisation process.