To All Creditors
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Section 98 report AVIATOR LGW LIMITED (COMPANY NUMBER 08840120) (“LGW”) AVIATOR BHX LIMITED (COMPANY NUMBER 08840141) (“BHX”) AVIATOR NCL LIMITED (COMPANY NUMBER 08840117) (“NCL”) (COLLECTIVELY “THE COMPANIES”) 12 December 2016 Table of Contents Section Contents 1 Introduction 2 Schedule of Statutory Information 3 Extracts from Financial Statements 4 Directors' Statement of the Companies History and Reasons for Failure 5 Summary of Directors' Statement of Affairs 6 Schedule of Creditors 7 Estimated Deficiency Account 8 Liquidators’ Exercise of Power Since EGM 9 Resolutions 10 The Liquidators’ fee disclosure 11 Liquidators’ Receipts and Payments accounts Glossary Act Insolvency Act 1986 (as LGW Aviator LGW Limited amended) AAS Aviator Airport Services UK Liquidators Lisa Rickelton and Andrew Limited Johnson AAAEAB Aviator Airport Alliance Europe NCL Aviator NCL Limited AB BHX Aviator BHX Limited Rules Insolvency Rules 1986 (as amended) Group Aviator Airport Alliance Europe TUPE Transfer of Undertakings AB and its subsidiaries (Protection of Employment) Regulations Page 2 Section 1 - Introduction As you are aware, Lisa Rickelton and Andrew Johnson (“the Liquidators”) were appointed as the Companies' nominated liquidators (“the Liquidators”) by resolutions of the members of the Companies on 1 December 2016, in accordance with section 84(1)(b) of the Insolvency Act 1986 (as amended) (“the Act”). On 28 November 2016, the Directors of the Companies’ resolved that, following the Liquidators’ appointment, the Liquidators should convene initial meetings of Companies’ creditors pursuant to section 98 of the Act. The meetings were duly convened on 1 December 2016 to be held at FTI Consulting LLP, 200 Aldersgate Street, London, EC1A 4HD on 12 December 2016 at: Company Company number Time of meeting Aviator LGW Limited (in liquidation) (“LGW”) 08840120 10:30 Aviator BHX Limited (in liquidation) (“BHX”) 08840141 11:00 Aviator NCL Limited (in liquidation) (“NCL”) 08840117 11:30 This report sets out the information provided to creditors at those meetings. No payments have been made in respect of the arrangements for the creditors’ meeting. The estimated amount of the costs incurred total £1,684, comprising c.£284 for statutory advertising (£79 plus VAT per company) and c.£1,400 of postage / printing costs incurred in contacting the Companies’ creditors. There were no costs associated with preparing the Directors’ Statement of Affairs. Page 3 Section 2 - Schedule of Statutory Information Company Name Aviator LGW Limited (in Liquidation) Registered Number: 08840120 Date of Incorporation: 10 January 2014 Registered Office: Room 3037 Third Floor Balcony South Terminal, Gatwick Airport, Gatwick, West Sussex, RH6 0NP Previous Names (if any) Date of Change Previous Name 21 August 2014 Gatwick Handling Newco Limited Trading Address: Room 3037 Third Floor Balcony South Terminal, Gatwick Airport, Gatwick, West Sussex, RH6 0NP Directors Name Appointed Resigned Jo Alex Tanem 26 April 2016 N/A Andreas Vassilaros 15 May 2014 N/A Birgitta Andersson 15 May 2014 28 November 2016 Thomas Hoehn 10 January 2014 15 May 2014 Johannes Spindler 10 January 2014 15 May 2014 Paul Synnott 15 May 2014 26 April 2016 Deborah Westlake 10 January 2014 31 August 2016 Company Secretary: Cornhill Secretaries Limited Authorised Share Capital: £1 ordinary shares Issued Share Capital: Shareholder Shares Held Aviator Airport Services UK Ltd 1 Page 4 Company Name Aviator BHX Limited (in Liquidation) Registered Number: 08840141 Date of Incorporation: 10 January 2014 Registered Office: Room 3037 Third Floor Balcony South Terminal, Gatwick Airport, Gatwick, West Sussex, RH6 0NP Previous Names (if any) Date of Change Previous Name 21 August 2014 Birmingham Handling Newco Limited Trading Address: Birmingham International Airport, Birmingham, West Midlands, B26 3QJ Directors Name Appointed Resigned Jo Alex Tanem 26 April 2016 N/A Andreas Vassilaros 15 May 2014 N/A Birgitta Andersson 15 May 2014 28 November 2016 Thomas Hoehn 10 January 2014 15 May 2014 Johannes Spindler 10 January 2014 15 May 2014 Paul Synnott 15 May 2014 26 April 2016 Deborah Westlake 10 January 2014 31 August 2016 Company Secretary: Cornhill Secretaries Limited Authorised Share Capital: £1 ordinary shares Issued Share Capital: Shareholder Shares Held Aviator Airport Services UK Ltd 1 Page 5 Company Name Aviator NCL Limited (in Liquidation) Registered Number: 08840117 Date of Incorporation: 10 January 2014 Registered Office: Room 3037 Third Floor Balcony, South Terminal, Gatwick Airport, Gatwick, West Sussex, RH6 0NP Previous Names (if any) Date of Change Previous Name 21 August 2014 Newcastle Handling Newco Limited Trading Address: Newcastle International Airport, Woolsington, Newcastle Upon Tyne, NE13 8BZ Directors Name Appointed Resigned Jo Alex Tanem 26 April 2016 N/A Andreas Vassilaros 15 May 2014 N/A Birgitta Andersson 15 May 2014 28 November 2016 Thomas Hoehn 10 January 2014 15 May 2014 Johannes Spindler 10 January 2014 15 May 2014 Paul Synnott 15 May 2014 26 April 2016 Deborah Westlake 10 January 2014 31 August 2016 Company Secretary: Cornhill Secretaries Limited Authorised Share Capital: £1 ordinary shares Issued Share Capital: Shareholder Shares Held Aviator Airport Services UK Ltd 1 Page 6 Section 3 – Extracts from Financial Statements Aviator LGW Limited Aviator NCL Limited Oct -16 Dec-15 Dec-14 Oct -16 Dec-15 Dec-14 £'000 (Man. a/c's) (unaudited) (audited) £'000 (Man. a/c's) (unaudited) (audited) Airport Equipment 478 221 690 Airport Equipment 244 324 432 Trade Debtors (note 1) (2,294) 3,778 2,088 Trade Debtors (note 1) 684 332 304 Intercompany Debtors 4,219 2,619 1,030 Intercompany Debtors 0 272 347 Other assets 1,037 1,011 297 Other assets 283 85 141 Total Assets 3,440 7,629 4,106 Total Assets 1,211 1,013 1,224 Trade Creditors (3,339) (2,836) (1,478) Trade Creditors (487) (387) (346) Intercompany (1,041) (1,080) (1,123) Intercompany (1,154) (820) (703) Other Liabilities (2,794) (3,377) (1,320) Other Liabilities (152) (99) (253) Total Liabilities (7,174) (7,293) (3,921) Total Liabilities (1,792) (1,307) (1,302) Shareholder's deficit (3,734) 336 185 Shareholder's deficit (581) (293) (78) Note 1. Trade debtors includes funding payments made under funding Note 1. Trade debtors includes funding payments made under funding agreement agreement Additional financial information Additional financial information Oct -16 Dec-15 Dec-14 Oct -16 Dec-15 Dec-14 £'000 (Man. a/c's) (unaudited) (audited) £'000 (Man. a/c's) (unaudited) (audited) Turnover 42,093 22,837 15,401 Turnover 7,076 3,494 2,585 Net profit (4,070) 151 185 Net profit (288) (215) (78) Directors' remuneration n/a n/a n/a Directors' remuneration n/a n/a n/a Dividends paid - - - Dividends paid - - - Aviator BHX Limited Oct -16 Dec-15 Dec-14 £'000 (Man. a/c's) (unaudited) (audited) Airport Equipment 59 60 62 Trade Debtors (note 1) 1,206 526 500 Intercompany Debtors 0 129 0 Other assets 603 272 158 Total Assets 1,868 987 720 Trade Creditors (968) (697) (654) Intercompany (2,350) (1,458) (475) Other Liabilities (388) (347) (359) Total Liabilities (3,706) (2,502) (1,488) Shareholder's deficit (1,838) (1,515) (768) Note 1. Trade debtors includes funding payments made under funding agreement Additional financial information Oct -16 Dec-15 Dec-14 £'000 (Man. a/c's) (unaudited) (audited) Turnover 6,803 5,592 2,467 Net profit /(loss) (323) (747) (768) Directors' remuneration n/a n/a n/a Dividends paid - - - The Companies’ last audited accounts were up to 31 December 2014. The date of the auditors’ report was 22 December 2015. We note significant revenue growth during 2016 following LGW’s acquisition of Swissport whilst growth in BHX and NCL was achieved organically. LGW was marginally profitable during 2014 and 2015 but, based on the management accounts, incurred material losses during 2016 as noted below. BHX and NCL profit and loss accounts show those entities have been loss making for a number of years. We note that the Companies’ principal liabilities relate to monies owed to other entities within the Aviator Group. Page 7 Section 4 - Directors’ Statement of Companies History and Reasons For Failure Accentsix Holding Management LTD 52% 48% Aviator Airport Alliance Europe AB 556822-8927 SEK 100% Aviator Airport 15 trading / Services UK non trading LTD entities 8979599 GBP Aviator LGW Aviator BHX Ltd Ltd 100% 100% 8840120 08840141 GBP GBP Aviator NCL Ltd 100% 08840117 GBP Entities placed into liquidation on 1 December 2016 A simplified group structure chart as at the date of the Liquidators’ appointment is shown above. The pre appointment activity of each of the Companies is as follows: Aviator LGW Limited: Trading company – Ground handling services at Gatwick Airport. Aviator BHX Limited: Trading company – Ground handling services at Birmingham Airport. Aviator NCL Limited: Trading company – Ground handling services at Newcastle Airport. Aviator Airport Services Limited is a non-trading holding company and sole shareholder of LGW, BHX and NCL. Aviator Airport Alliance Europe AB (“AAAEAB”) is a holding company owned 52% by Accentsix Holding Limited and 48% held by the Group’s management team. The 15 non UK entities which are subsidiaries of AAAEAB provide ground handling services in Manchester and across the Nordic countries. The Companies’ have granted a security assignment to the Group’s principal lender over all rights and interests under all customer contracts. No action was taken by the Group or the Group’s principal lenders to perfect these assignments. Therefore it does not appear that this security is effective. Page 8 Trading background The Companies were part of a wider group of companies (“the Group”) providing ground handling services at airports across the United Kingdom and the Nordics. The UK ground handling services market conditions in recent years has been challenging, with significant pricing pressures and low margins which resulted in only marginal profits generated by LGW and losses in BHX and NCL during 2014 and 2015 The Companies problems were further compounded by a lack of operational control and deficiencies in planning and administrative processes materially impacting 2016 trading across LGW, BHX and NCL.