D&J (Steels) Limited (In Administration)

www.pwc.co.uk

In accordance with Paragraph 49 of Schedule B1 of the Insolvency Act 1986 D&J (Steels) Limited and Rule 3.35 of the Insolvency (England and Wales) Rules 2016 (in administration)

Date High Court of Justice 17 September 2019 Business and Property Courts in Birmingham Anticipated to be Insolvency & Companies List (ChD) delivered on 20 September 2019

Case No. CR-2019-BHM-000713

Joint administrators’ proposals for achieving the purpose of administration

Contents

Abbreviations and definitions 1

Why we’ve prepared this document 3

A summary of what you could recover 4

Brief history of the Company and why it’s in administration 5

What we’ve done so far and what’s next if our proposals are approved 8

Estimated financial position 12

Statutory and other information 13

Appendix A: Pre-administration costs 14

Appendix B: Copy of our report to creditors on the sale of the business and assets 15

Appendix C: Summary estimated financial position including creditors’ details 16

Notice to creditors seeking decisions by correspondence 18

Common questions and answers about the decisions we are seeking, including the approval of the Administrators’ proposals 21

Proof of debt 24

D&J (Steels) Limited (in administration) Joint Administrators’ proposals for achieving the purpose of administration D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

Abbreviations and definitions

The following table shows the abbreviations and insolvency terms that may be used in this document:

Abbreviation or definition Meaning Administrators/we/us/our Michael Thomas Denny and David Matthew Hammond both of PricewaterhouseCoopers LLP Cornwall Court, 19 Cornwall Street B3 2DT Close Brothers Close Brothers Limited, a secured creditor BEIS Department for Business, Energy & Industrial Strategy BIS Bromford Iron & Steel Company Limited Brockhouse Brockhouse Group Limited Company D&J (Steels) Limited CVA Company voluntary arrangement under Part 1 IA86 CVL Creditors’ voluntary liquidation Group Original Steel Services Limited, Bromford Iron & Steel Company Limited, Brockhouse Group Limited and the Company collectively HMRC HM Revenue & Customs IA86 Insolvency Act 1986 IR16 Insolvency (England and Wales) Rules 2016 preferential creditors Primarily employee claims for unpaid wages earned in the four months before the insolvency up to £800, holiday pay and unpaid pension contributions in certain circumstances prescribed part The amount set aside for unsecured creditors from floating charge funds in accordance with section 176A IA86 and the Insolvency Act 1986 (Prescribed Part) Order 2003 Purchaser Barrett Steel Limited PwC PricewaterhouseCoopers LLP RPS Redundancy Payments Service, part of the Insolvency Service, which is an executive agency sponsored by BEIS, and which authorises and pays the statutory claims of employees of insolvent companies under the Employment Rights Act 1996 Sch B1 IA86 Schedule B1 to the Insolvency Act 1986 secured creditor A creditor with security in respect of their debt, in accordance with Section 248 IA86 SIP Statement of Insolvency Practice. SIPs are issued to insolvency practitioners under procedures agreed between the insolvency regulatory authorities. SIPs set out principles and key compliance standards with which insolvency practitioners are required to comply. SIP 9 Statement of Insolvency Practice 9: Payments to insolvency office holders and their associates

1 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

Abbreviation or definition Meaning SIP 13 Statement of Insolvency Practice 13: Disposal of assets to connected parties in an insolvency process SIP 16 Statement of Insolvency Practice 16: Pre-packaged sales in administrations SPA The agreement for the sale and purchase of the business and assets of the Company dated 11 September 2019 and made between D&J (Steels) Limited (in administration), Michael Thomas Denny and David Matthew Hammond and Barrett Steel Limited TopCo Original Steel Services Limited TUPE Transfer of Undertakings (Protection of Employment) Regulations 2006 unsecured creditors Creditors who are neither secured nor preferential

2 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

Why we’ve prepared this document

On 11 September 2019, the Company went into administration and David Matthew Hammond and I were appointed as joint administrators. We tell you in this document why the Company was put into administration. We give you a brief history and set out our proposals for achieving the purpose of administration. We include details of the Company’s assets and liabilities, and say how likely we are to be able to pay each class of creditor.

According to IA86, the purpose of an administration is to achieve one of these objectives:

(a) rescuing the company as a going concern, or if that is not possible or if (b) would achieve a better result for the creditors than (a) (b) achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration), or finally, if that is not possible (c) realising the company’s assets to pay a dividend to secured or preferential creditors.

In this case, we’re following objective (b), to achieve a better result for creditors than would be likely if the Company were wound up (without first being in administration), as it was not reasonable practical to rescue the Company as a going concern.

Our job is to manage the Company until creditors agree our proposals for achieving the purpose of administration and we’ve implemented them so far as possible. After that, the administration will end.

The whole of this document and its appendices form our statement of proposals for achieving the purpose of administration.

We are seeking creditors’ decisions by correspondence on the following matters:

 The approval of our proposals for achieving the purpose of administration;  That a creditors’ committee, should not be formed.

Please see the decision notice enclosed with these proposals for further information. If you’ve got any questions, please get in touch with my colleague, Helena Perevalova, on 0113 288 2046.

Signed ………………………………… Joint administrator of D&J (Steels) Limited

Michael Thomas Denny and David Matthew Hammond have been appointed as joint administrators of D&J (Steels) Limited to manage its affairs, business and property as its agents and act without personal liability. Michael Thomas Denny and David Matthew Hammond are licensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales. The joint administrators are bound by the Insolvency Code of Ethics which can be found at: https://www.gov.uk/government/publications/insolvency-practitioner-code-of-ethics

The joint administrators may act as controllers of personal data as defined by UK data protection law depending upon the specific processing activities undertaken. PricewaterhouseCoopers LLP may act as a processor on the instructions of the joint administrators. Personal data will be kept secure and processed only for matters relating to the joint administrators’ appointment. Further details are available in the privacy statement on the PwC.co.uk website or by contacting the joint administrators.

3 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

A summary of what you could recover

Estimated outcome for secured creditors

What secured creditors are owed: £378,000

% Recovery Forecast timing What we think secured creditors could recover: 100% 6-12 months

Estimated dividend prospects For preferential creditors: Not applicable Not applicable

For unsecured creditors: Up to 10% 6-12 months

This is a brief summary of the possible outcome for creditors based on what we know so far. You shouldn’t use it as the main basis of any bad debt provision or debt trading .Please read the rest of this document.

4 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

Brief history of the Company and why it’s in administration

We’ve enclosed at Appendix B the information required to be provided to you by SIP16. Some of that information is repeated below where beneficial or necessary to do so, for the purpose of these proposals. Background The Company was a steel stockholder operating from premises in West Bromwich, in the West Midlands. The Company is part of a group of companies owned by Original Steel Services Limited.

As well as the Company, the Group also consists of a steel rolling business, Bromford Iron & Steel Company Limited and a forging business, Brockhouse Group Limited.

The Company had traded as a steel stockholder since the 1970s, focusing on the engineering, forging, fabrication and oil and gas sectors. It had ten employees based at premises leased to BIS, which it informally occupied.

The Company’s major customer was Brockhouse, representing about 35% of its total sales. The balance of its customers were made up of various different companies in the forging and engineering sectors, with no one customer representing more than 6% of annual turnover.

The business operated on relatively low margins, with customer service being at the core of the success of the business as well as careful stock management. The draft accounts for the financial year ended 31 March 2019 reported turnover of over £4m, however due to high costs of sales and other associated costs, the business had incurred trading losses over recent years. Statutory accounts show losses of £95k and £140k for the years ended March 2018 and 2019 (draft).

The circumstances leading to our appointment

In addition to the recent losses described above, management accounts prepared for April and May 2019 showed further losses of £7k for the current financial year.

In January 2019, JA Envirotanks Limited (a company owned by TopCo) went into liquidation. As a result of the liquidation of a group company, the credit insurers of the Company’s key suppliers placed their cover over the Company’s debts under review, which caused extreme pressure on the working capital of the Company. In May 2019, suppliers advised the Company that credit insurance would be withdrawn with effect from July 2019 due to the liquidation of JA Envirotanks, notwithstanding that it operated independently of the Company. Consequently the Company was now required to pay for supplies on a pro forma basis, which brought with it a significant working capital requirement that the Company did not have the resources to meet..

Following the withdrawal of suppliers’ credit insurance, TopCo sought advice from PwC regarding the Company’s financial position. Following the consideration of various options (described in more detail in Appendix B), the Company engaged PwC to undertake an accelerated sale process. No parties were willing to transact solvently. The best offer received was for only the business and assets of the Company, which coupled with the cash position confirmed that an insolvency process was unavoidable. As a consequence, we were appointed joint administrators on 11 September 2019. We explain below the sale that has been achieved. Pre-pack sale of the business and assets

A sale of the Company’s business and assets was completed on 11 September 2019; immediately following our appointment as joint administrators.

5 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

As required by SIP16 and SIP13, a detailed narrative explanation and justification of why a pre-packaged sale was undertaken and alternatives considered, is enclosed in Appendix B.

In summary:

 Total consideration for the sale of the business and assets was £240,000, payable on completion.

 For the reasons explained in Appendix B, the alternative outcome was most likely the insolvency of the Company followed by a significant, necessary and immediate curtailment in trading operations, leading to little prospect of a sale on the scale achieved; and with substantial loss of value impacting on recoveries and losses for all classes of creditors.

 The sale to Barrett Steel Limited enables the statutory purpose of the administrations to be achieved – it represented the best offer received, and so provided the best available outcome for creditors as a whole in all circumstances. The sale preserved the jobs of the Company’s ten employees..

The sale proceeds are held by our solicitors and will be transferred to us in due course. There have been no other receipts or payments and therefore, a receipts and payments account is not included with this report.

Pre-administration costs

PwC’s initial role was to provide cash flow review, options advice and stakeholder management support. . Given the parlous cash position, this quickly developed into implementation of an accelerated sale process, critical payments review and contingency planning for an insolvency process.

Some (but not all) of the above work was performed with a view to the Company entering administration, including:

 Negotiating and substantially completing the sale of the Company’s business and assets to the Purchaser, ongoing contingency planning work to prepare for different administration scenarios, including a collapse of the Company without a pre-packaged sale in place;

 Discussion with key suppliers regarding the sales process and ongoing operations in the period prior to the administration;

 Working with the Company’s directors and their legal advisers in preparing for administration;

 Statutory documentation and declarations required for effecting the appointment; and

 Internal procedures in preparation for accepting the appointment.

The pre-administration costs incurred (with a view to the Company entering administration) to 11 September 2019 are £45,547.94. £11,013.67 of pre-administration costs were paid by the Company. A balance of £34,534.27 remains unpaid and we will be seeking approval of payment of these costs as an expense of the administration in due course.

In addition, there are unpaid legal costs in the sum of £15,469.20 incurred by Irwin Mitchell. Legal costs were incurred principally in the negotiation and preparation of documentation for the sale, steps necessary to effect the appointment and other preparatory work for the administration.

We believe that the above work was necessary in order to achieve the objective of the administration and to maximise realisations (or minimise losses) for creditors of the Company. Our work identified and progressed interest from potential buyers during which time the business continued to trade without the disruption and impact of an insolvency event.

6 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

If this work had not been done prior to our appointment, it would have significantly reduced the prospect of securing a sale of the assets on any better terms that what was achieved.

More details of our fees and expenses can be found at Appendix A. To the best of our knowledge and belief, no fees or expenses were charged by any other insolvency practitioner.

The payment of unpaid pre-administration costs as an expense of the administration is subject to approval under Rule 3.52 IR16 and doesn’t form part of our proposals, which are subject to approval under Paragraph 53 Sch B1 IA86. If you elect a creditors’ committee, it will be up to the committee to give this approval under Rule 3.52 IR16. If there is no committee, we will seek approval from creditors in due course.

7 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

What we’ve done so far and what’s next if our proposals are approved

Management and financing of the Company’s affairs and business

Immediately after our appointment, we completed the sale of the business and assets to the Purchaser for £240k.

Assets excluded from the sale

A number of assets were specifically excluded from the sale to the Purchaser. These include the following:

 Cash at bank and in hand;  Book debt realisations (subject to financing arrangement);  The Company’s name;  Contracts;  All shareholdings, investments and other securities; and  Any real property owned or leased.

In the course of our ongoing work, we will take steps to realise any value in these assets or otherwise deal with them in the appropriate manner, including providing reasonable assistance to third parties with a proprietary interest in them. We will provide an update in our first progress report to creditors in approximately six months’ time.

In Appendix C and in the current absence of the directors’ own statement of the Company’s affairs, we provide an estimate of the financial position at the date of our appointment. This shows the potential outcome for creditors, given what we currently know about the Company’s assets and liabilities.

Stock and retention of title

We expect a significant proportion of suppliers to claim ownership to stock in the Company’s possession at the time of our appointment. Any supplier wishing to claim retention of title (“ROT”) and has not yet done so, should contact David Reece of Barrett Steel Limited on 01274 682281. as soon as possible.

All stock previously in the Company’s possession has been frozen and will not be used by the Purchaser without consent from us.

Book debts

Debts owed to the Company are subject to an invoice finance facility provided by Close Brothers. At the time of our appointment, the sales ledger had a book value of £488k. Close Brothers also has security for its lending (of £387k) with a fixed and floating charge over the Company’s assets. Therefore, book debts have been shown as a fixed charge asset in Appendix C to illustrate the secured lenders’ proprietary interest.

Close Brothers will be conducting the debt collection process. Any book debt surplus will be transferred to the administration estate.

Statutory work we still need to do

Other matters to be completed specific to the administration process, include those set out below.

 We have a duty to investigate what other assets there may be (including potential claims against third parties including the directors) and what recoveries can be made. This includes carrying out appropriate investigations into the conduct of the directors and recent former directors.

8 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

 During the course of the administration, we will be winding-down the Company’s affairs, including any necessary final tax and VAT matters; and dealing with the Company’s books and records.

 We must comply with all relevant insolvency legislation and regulatory obligations arising as a result of the insolvency of the Company and our appointment as joint administrators. These typically include periodic reports to creditors, obtaining approval for our remuneration and internal controls to ensure the administration strategies continue to be appropriate and outstanding matters are being progressed on a timely basis.

Managing the Company’s affairs and conducting the administration (including our remuneration) will be financed by asset realisations. Connected party transactions In accordance with SIP 13, we are required to disclose any known connected party transactions that occurred in the period following our appointment or any proposed connected party transactions. We can confirm that no such transactions have occurred and none are expected. Directors’ conduct and investigations One of our duties is to look at the actions of anybody who has been a director of the Company in the three years before our appointment. We have to submit our findings to BEIS within three months of our appointment.

We also have to decide whether any action should be taken against anyone to recover or contribute to the Company’s assets If you think there is something we should know about and you haven’t yet told us, please complete the relevant section of the proof of debt attached to this document. This is part of our normal work and doesn’t necessarily imply any criticism of the directors’ actions. Objective of the administration We are pursuing objective (b) for the statutory purpose for the administration, which is to achieve a better result for the Company’s creditors as a whole than would be likely if the Company was wound up (without first being in administration).

We believe that this objective will be achieved as a result of the sale described earlier, principally the improved outcome for the unsecured creditors, avoidance of preferential claims and mitigation of losses for certain other creditors, as we would not have been able to achieve a sale of the Company’s assets should the Company have been placed into liquidation (without first being in administration).

We’ll continue to manage and finance the Company’s business, affairs and assets from asset realisations. We may also investigate and, if appropriate, pursue any claims the Company might have. We’ll also do anything else we think appropriate, to achieve the purpose of the administration or to protect and preserve the Company’s assets or to maximise realisations for any other purpose incidental to these proposals. Estimated outcome for creditors Secured creditors We think the secured creditor will be repaid in full. The outstanding balance as at the date of administration is understood to be in the region of £378k and is secured by a debenture dated 12 April 2018, including a fixed and floating charge over book debts and other assets.

Preferential creditors (mainly employees) The Company’s employees have transferred to the Purchaser under TUPE and therefore no preferential claims are expected to arise.

9 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

Unsecured creditors In administration, amounts become available for creditors potentially from two sources (1) any prescribed part fund and (2) any surplus remaining after secured debts have been repaid in full.

The prescribed part is a fund that has to be made available for unsecured creditors and is ring-fenced out of “net property”. Net property is floating charge realisations after costs, and after paying - or setting aside enough to pay - preferential creditors in full. But it only has to be made available where the floating charge was created on or after 15 September 2003.

The amount of the prescribed part is:

 50% of net property up to £10,000  20% of net property above £10,000  subject to a maximum of £600,000.

Whilst there is a floating charge created after 15 September 2003, we explained above that we estimate that the secured creditor will be repaid in full and will have no financial interest in the Company’s net property. As such, it is not necessary to ring-fence any prescribed part fund and any net property would be available to unsecured creditors in its entirety.

Based on what we currently know, we think a dividend of up to 10% may be available to the unsecured creditors. We’ve calculated this based on our estimate of the value of the unsecured creditors. The amount of the dividend will depend on the final level of admitted claims, any future realisations and administration costs.

Creditors’ committee We’re seeking the agreement of creditors that a creditors’ committee should not be formed in this case. We are not aware of any creditor who has expressed an interest in the establishment (or being a member of) any committee. However, please see this link for a guide to creditors’ committees. https://www.r3.org.uk/media/documents/publications/professional/Creditors_Administration.pdf Our fees and disbursements It will be up to the creditors’ committee to fix the basis of our fees and Category 2 disbursements. But if there’s no committee, we will ask the general body of creditors to do so instead. If creditors or the committee do not fix the basis of our fees and Category 2 disbursements, we may apply to the court to fix them no later than 18 months after the date of our appointment.

We expect to propose that our fees be fixed based on the time we and our staff spend on the case at our normal charge out rates for this type of work. We will also be proposing that disbursements for services provided by our firm (defined as Category 2 disbursements in SIP 9) are charged as per our firm’s policy.

Prior to the determination by the creditors or any committee, we must provide creditors with certain information regarding the work we expect to do during the administration and an estimate of our fees and expenses. We will provide this information to creditors separately and in due course. Ending the administration

Our exit route will depend on the outcome of the administration. At the moment we think that the most likely exit routes are as described below.

We’ve said that we think there will be enough funds to pay a dividend to unsecured creditors. Assuming that’s the case, at the appropriate time in the circumstances of the case, we’ll apply to the court for permission to pay any surplus funds to unsecured creditors. If this is granted, we’ll end the administration by filing a notice with the Registrar of Companies and the Company will be dissolved three months later.

10 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

If we don’t get court permission to pay creditors during the administration, we’ll put the Company into creditors’ voluntary liquidation (CVL), or comply with the terms of any court order if different. We may also move the Company to CVL if we consider it to be more beneficial for creditors than the above application to court.

If the Company goes into CVL, we propose that Michael Thomas Denny and David Matthew Hammond are appointed as joint liquidators (or, if replacement administrators are appointed, any persons appointed as administrators at the time of the registration of notice of moving from administration to creditors' voluntary liquidation per Paragraph 83(4) Sch B1 IA86) and that any act required or authorised to be done by the joint liquidators can be done by either or both of them. Creditors may, before these proposals are approved, nominate a different person or persons as liquidator(s), in accordance with Paragraph 83(7)(a) Sch B1 IA86 and Rule 3.60(6) IR16.

If it turns out in due course that there won’t be a dividend for unsecured creditors, once we’ve finished all our work, we’ll file a notice with the Registrar of Companies and the Company will be dissolved three months later. But if we think that there are matters that should be conducted/investigated in a liquidation that than in the administration, we may instead apply for a court order ending the administration and for the Company to be wound-up.

11 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

Estimated financial position

The directors have not yet given us a statement of affairs for the Company. This is because we have issued these proposals as soon as reasonably practicable and the directors are still in the process of preparing the statement. A copy will be filed at Companies House in due course.

We therefore set out at Appendix C, an estimated financial position of the Company as at 11 September 2019. As required by law, this includes details of the creditors’ names, addresses and debts, including details of any security held, to the best of our knowledge at this time.

We recognise creditors may want to contact each other to discuss certain aspects of the case. If you need more information to be able to do this, please, write to us or email your request to [email protected] with the name of the company in the title and including your name and your company name (if applicable) in the email.

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Statutory and other information

Court details for the administration: High Court of Justice Business and Property Courts in Birmingham Insolvency & Companies List (ChD)

Case CR-2019-BMH-000713 Full name: D&J (Steels) Limited Trading name: D&J Steels Registered number: 06508325 Registered address: Bromford Buildings, Bromford Lane, West Bromwich, West Midlands, England, B70 7JJ Company directors: Peter Francis Davies Stephen John Huggins Christopher Hutton-Penman Stephen Harold Walters Company secretary: Martyn John Coles Shareholdings held by the directors and None secretary: Date of the administration appointment: 11 September 2019 Administrators’ names and addresses: Michael Thomas Denny and David Matthew Hammond both of PricewaterhouseCoopers LLP of Cornwall Court, 19 Cornwall Street, Birmingham B3 2DT Appointer’s/applicant’s name and address: The directors of the Company, Bromford Buildings, Bromford Lane, West Bromwich, West Midlands, England, B70 7JJ Objective being pursued by the Objective (b) – achieving a better result for the Administrators: Company’s creditors as a whole than would be likely if the Company were wound up (without first being in administration), or finally, if that is not possible. Division of the Administrators’ In relation to Paragraph 100(2) Sch B1 IA86, during responsibilities: the period for which the administration is in force, any function to be exercised by the persons appointed to act as administrators may be done by any or all of the persons appointed or any of the persons for the time being holding that office. Regulation (EU) 2015/848 of the European The Regulation applies to this administration and the Parliament and of the Council of 20 May 2015 proceedings are main proceedings on Insolvency Proceedings (recast) :

13 D&J (Steels) Limited (in administration) – Joint Administrators’ proposals for achieving the purpose of administration

Appendix A: Pre-administration costs

The table below provides details of costs which were incurred before our appointment as administrators but with a view to the Company entering administration. Details of the work done and expenses incurred follow.

Paid Unpaid amount amount (£) (£) Our fees as Administrators-in-waiting 11,013.67 34,534.27 Expenses incurred by us as Administrators-in-waiting - 15,469.20 Fees charged by other persons qualified to act as an insolvency practitioner - - Expenses incurred by other persons qualified to act as an insolvency - - practitioner Total 11,013.67 50,003.47

Our work was performed under a letter of engagement between PwC and TopCo dated 12 July 2019, and principally relates to the time spent dealing with the sale of the business and assets. See earlier in this report for further information.

Approval of pre-administration costs

The payment of unpaid pre-administration costs as an expense of the administration is subject to approval under Rule 3.52 IR16 and doesn’t form part of our proposals, which are subject to approval under Paragraph 53 Sch. B1 IA86. We expect that the general body of creditors will be the relevant class of creditor to review and approve these costs for payment, unless there is a creditors committee established.

Appendix B: Copy of our report to creditors on the sale of the business and assets

When viewed on our website, this Appendix can be viewed by clicking the link:

Initial letter to creditors with SIP16 report

Appendix C: Summary estimated financial position including creditors’ details

As the directors have not yet given us a statement of affairs for the Company, we set out below the estimated financial position of the Company as at 11 September 2019. Please also refer to our earlier comments.

Note £'000 s Book Value Estimated to Realise Assets specifically pledged Sales ledger debtors 1 488 415 Less Termination charges and costs (37) Less Close outstanding finance (378) (378) Surplus/(deficit) on fixed charge [A] -

Assets not specifically pledged Investments in subsidiaries 2 406 - Fixtures and fittings 11 - Plant and machinery 193 - Less HP financing against P&M (12) Computer equipment 35 - Stock 540 - Purchase consideration 240 Total floating charge realisations 240

Intercompany receivable 3 157 150

Total assets available for preferential creditors 390

Preferential employee claims -

Surplus/(deficit) available for unsecured creditors 390

Bromford intercompany creditor 4 (467) Trade creditors (869) HMRC (5) Unsecured employee claims -

Deficit with regards to unsecured creditors (951)

NB: the analysis above excludes any expenses, professional fees or other associated costs of realisation. We will share more developed estimates of these in our remuneration report.

1) Assumed 85% collectible. 2) No realisable value in dormant subsidiaries. 3) Trade debt due from Brockhouse Limited not subject to Close's security. The analysis above assumes a full recovery with the debt continuing to be paid down to terms. 4) This figure is broadly 50% intercompany charges and 50% supply of material.

List of creditors

Name Address 1 Address 2 Address 3 Address 4 Postcode Acct No. Amount £ Acciaierie Venete Spa C/O The Crucible Trading Co Unit 4, St Marys Court Market Place, Tickhill Doncaster DN11 9LX ACCI01 14,145.68 Acenta Steel Ltd Peartree Lane Woodside Dudley West Midlands DY2 0QS ACEN01 94,946.36 Acenta Steel Ltd Paynes Lane Rugby CV21 2UW ACEN02 - 22.20 Acenta Steel Services Planetary Road Willenhall West Midlands WV13 3SW ACEN04 436,890.52 Angel Springs Limited Angel House Shaw Road Wolverhampton WV10 9EL ANGE01 215.46 Arcelormittal Commercial UK Ltd 3rd Floor Fore 2, Huskinsson Way Shirley Solihull B90 4SS ARCE01 16,543.47 A-Stat Office Technology Ltd 15 Hollybush Lane Penn Wolverhampton WV4 4JJ ASTA01 588.34 Avanti Gas Limited Bridge Street Holloway Bank Wednesbury West Midlands WS10 0AW AVAN01 90.93 Barrett Eng Steel Midlands Limited Autobase Industrial Park Tipton Road Tividale West Midlands B69 3HF BARR01 15,113.89 Barrett Eng Steel Trade Unit 8, Autobase Industrial PA Tipton Road Tividale West Midlands B69 3HU BARR02 7,894.00 Beeline Promotional Products Limited Sapphire Heights Courtyard 32 Tenby Street North Birmingham B1 3ES BEEL01 356.40 Blencathra Industries Globe Works Penistone Road Kelham Island Sheffield S6 3AE BLEN01 28,963.00 Boswell & Co (Steels) Ltd Park Lane Cradley Halesowen West Midlands B63 2QP BOSW01 11,323.51 Bright Steels Limited Norton Works Malton North Yorkshire YO17 9BD BRIG01 2,026.40 British Gear Association Stephenson Building University of Newcastle Newcastle upon Tyne NE1 7RU BRIT01 870.00 Bromford Iron & Steel Limited Bromford Lane West Bromwich West Midlands B70 7JJ BROM01 467,000.00 Canada Life Group Insurance 3 Rivergate Temple Quay Bristol BS1 6ER CANA01 2,033.44 Capco Palmer Steels Limited Unit 7, Whitehall Ind Park Whitehall Road Great Bridge, Tipton West Midlands DY4 7JY CAPC01 14,611.20 Clarke Steels Limited Unit 3, Interlux Business Park 204 Oldbury Road West Bromwich B70 9ED CLAR01 25,917.54 Copeland & Craddock Limited Radnor Park Congleton Cheshire CW12 4PX COPE01 4,763.94 Crowe Clark Whitehall Hatherton House Hatherton Street Walsall WS1 1YB CROW01 9,600.00 C & S Steels Limited Highfield Road Bilston West Midlands WV14 0LQ CSST01 3,607.45 D A Cooper & Sons Limited Fullerton Road Templeborough Rotherham S60 1DH DACO01 6,173.76 Dawley Metals Limited Unit B, Wartell Bank Dawley Brook Kingswinford DY6 7QQ DAWL01 792.00 DB Crane Limited Unit 10 Sovereign Works Deepdale Lane Dudley DY3 2AF DBCR01 2,490.00 Duferco Special Steels (Europe) Avenue De Vilvorde 298 1130 Bruxelles Belgium DUFE01 - 11.97 E Hammond Case & Pallet Limited Noose Lane Willenhall West Midlands WV13 3AZ EHAM01 317.40 Euler Trade Indemnity 1 Canada Square London E14 5DX EULE01 1,956.31 F S W Limited BIP Site Tat Bank Road Oldbury West Midlands B69 4NH FSWL01 2,222.77 Fuel Card Services Limited Alexandra House Lawnswood Business Park Leeds LS16 6QY FUEL01 386.34 Green & Preece (Grinding) Limited Rufford Road Stourbridge West Midlands DY4 7NE GREE01 964.80 G-Tex Stainless Unit 1, Bagley Ind Park Railwharf Sidings Dudley D2 9DY GTEX01 15,000.00 HQA Limited 17 Norton Terrace Norton Canes Cannock Staffordshire WS11 9RY HQAL01 380.00 Impact Ireland (Metals) Limited 76 Cookstown Ind Estate Tallaght Dublin 24 Ireland IMPA01 3,203.45 JCT600 Contracts Limited Tordoff House Apperley Bridge Bradford BD10 0PQ JCT601 49.28 JRK Computer Supplies Unit 27 Wombourne Enterprise Park Bridgnorth Road Wombourne WV5 8AU JRKC01 143.64 Liberty Speciality Steels 7 Fox Valley Way Stocksbridge Sheffield S36 2JA LIBE01 52,951.35 Lift Truck Services Unit 1C Old Park Industrial Estate Old Park Road Wednesbury WS10 9LR LIFT01 1,859.59 Made in the Midlands Limited Faraday Wharf Holt Street Birmingham West Midlands B7 4BB MADE01 2,520.00 MICAS Services Limited Cedarwood Court Lea Lane Cookley Kidderminster DY10 3RH MICA01 2,566.41 Midland Steel Sections Limited Unit 71-73 Gibbons Ind Estate Dudley Road Kingswinford DY6 8XF MIDL01 14,690.02 Mitchell Oil Co Limited Unit 4 Thornleigh Trading Estate Netherton Dudley D2 8UB MITC01 197.40 M Precision Grinding Fusion House The Crescent Willenhall West Midlands WV13 2QR MPRE01 274.32 MSC Industrial Supply Co 7 Pacific Avenue Wednesbury West Midlands WS10 7WP MSCI01 122.80 NDT Midlands Unit 17 Planetary Road Ind Est Planetary Road Willenhall, Wolverhampton WV13 3XA NDTM01 180.00 OSSL Limited Turnpike House' Weymouth Road Martinstown Dorchester DT2 9JJ OSSL01 1,728.00 Ovako Imatra Oy Ab Finland C/O Ovako Limited Unit 2 York's Park Blowers Green Road Dudley DY2 8UL OVAK01 17,736.79 Pestokill Pest Control Graveoak East Lancashire Road Leigh Lancashire WN7 3SE PEST01 243.60 Phoenix Scales Limited 34 Oldbury Road West Bromwich West Midlands B70 9ED PHOE01 378.00 Phoenix Stapping Tool Repairs T/A Phoenix Packaging Unit 7, Grange Road Ind Estate Grange Road Batley WF17 6LN PHOE02 2,514.02 Pitchford Steelstock Limited Pedmore Road Ind Estate Pedmore Road Brierley Hill West Midlands DY5 1TU PITC01 4,165.81 Price Pallets Limited 10 William Kerr Road Tipton West Midlands DY4 7QJ PRIC01 405.00 The Race Group Unit 1A, The Wallows Ind Est Fens Pool Avenue Brierley Hill West Midlands DY5 1QA RACE01 120.00 Sawcroft UK Limited Penncricket Lane Rowley Regis West Midlands B65 0RE SAWC01 6,863.76 Serco Shared Service Centre PO Box 7785 Corby NN17 9GY SERC01 1,399.37 Shepherd Distribution Services Birley Vale Avenue Sheffield S12 2AX SHEP01 2,371.08 Somers Steelstock Haywood Forge Prospect Road Halesowen B62 8DZ SOME01 348.00 Southall Associates Limited Cranmore Place Cranmore Drive Solihull B90 4RZ SOUT01 1,500.00 Southdown Matrerials Testing Unit 5, Tansey Green Trading Est Tansey Green Road Brierley Hill West Midlands DY5 4TL SOUT02 288.00 Stokes Group Limited 34 Cochrane Road Dudley West Midlands DY2 0SF STOK01 5,764.80 Thermofax Limited Grazebrook Park Peartree Lane Dudley DY2 0XW THER01 528.00 Timothy Lawrence Insurance Elford Road Comberworth Tamworth B79 9BB TIMO01 6,411.22 Turners Pallets Unit 56, Rovex Business Park Hay Hall Road Tyseley Birmingham B11 2AQ TURN01 4,191.00 Wentworth Steels Limited 66 Hoyland Road Hoyland Common Barnsley South Yorkshire S74 0PB WENT01 10,095.00 W Pym & Sons Limited St Peters Road Garage Netherton Dudley West Midlands DY2 9HN WPYM01 2,231.11 HM Revenue and Customs Enforcement and Insolvency Service Durrington Bridge House Barrington Road Worthing BN12 4SE 5,000.00 Original Steel Services Limited Turnpike House Weymouth Road Martinstown Dorchester DT2 9JJ Close Brothers Limited * 10 Crown Place London EC2A 4FT 378,000.00 1,719,191.56 *secured creditor as described in the Joint Administrators proposals.

Notice to creditors seeking decisions by correspondence

In accordance with Name of Company Company Number rules 3.38 and 15.8 D&J (Steels) Limited 06508325 of the Insolvency (England and Wales) Rules 2016 In the Court case number High Court of Justice CR-2019-BHM-000713 Business Courts in Birmingham Insolvency and Companies List (ChD)

(full name of court)

(a) Insert full names of We (a) Michael Thomas Denny and David Matthew Hammond of PricewaterhouseCoopers administrators LLP, Cornwall Court, 19 Cornwall Street, Birmingham, B3 2DT, joint administrators of the Company give notice to creditors that we are seeking a decision by correspondence on the following resolution(s) (b) (b) Insert resolutions 1. THAT the administrators’ proposals dated 17 September 2019 be approved

2. THAT a creditors’ committee should not be established

We therefore invite you to vote on the above. To submit your vote please indicate below whether you are voting for or against each resolution and whether or not you want a committee to be established and return this notice to us by

post at the address below, to be received by us by 23.59 hrs on (c) 8 October 2019 (the decision date).

In order to be entitled to vote we must receive from you by 23.59 hrs on the decision date, a proof in respect of your claim in accordance with the Insolvency (England and Wales) Rules 2016 (IR16), failing which your vote will be disregarded. A proof of debt form which you can use is attached.

If your debt is treated as a small debt in accordance with rule 14.31(1) IR16 (creditors with claims of £1,000 or less), you must still deliver a proof to us by 23.59 hrs on the decision date if you wish to vote.

If you have opted out from receiving notices you may nevertheless vote if you provide a proof as set out above.

Creditors who meet one of the thresholds in section 246ZE of the Insolvency Act 1986 may, within five business days from the date of delivery of this notice, require a physical meeting to be held to consider the matter(s) set out above. The relevant thresholds are 10% in value of creditors, 10% in number of creditors, or 10 creditors.

If you wish to nominate any creditor(s) to be members of a creditors’ committee if creditors decide that a committee should be established, you must deliver your nomination to us by the decision date. A nomination can only be accepted if we are satisfied as to the creditor’s eligibility under rule 17.4 IR16.

A creditor may appeal a decision in accordance with rule 15.35 IR16 by applying to court not later than 21 days after the decision date.

Signed Joint Administrator

Dated 17 September 2019

Administrators’ postal address: PwC, Central Square, 8th Floor, 29 Central Square, Leeds LS1 4DL. Administrators’ contact telephone number: 0113 288 2046

Name of Company Company Number D&J (Steels) Limited 06508325 In accordance with rule 15.9 of the Insolvency (England and Wales) In the Court case number Rules 2016 High Court of Justice CR-2019-BHM-000713 Business and Property Courts in Birmingham Insolvency and Companies List (ChD)

To be completed by creditor and returned to the postal

address above if you wish to vote

I/We Insert creditor’s name ______and address, and registered number if a Company number (if creditor is a company) ______company 0f______

______

vote as follows:

Delete as applicable

Resolution (1) THAT the administrators’ proposals dated 17 September * for / against 2019 be approved

Resolution (2) THAT a creditors’ committee SHOULD NOT be * for / against established

Committee member: I/we nominate [creditor to insert name of creditor*] ______to be a member of the committee if one is

established.

*If you wish to nominate a creditor to be a member of a committee if one is established, please insert here the name of that creditor. A creditor can nominate themself or another creditor. If the creditor is a company you must insert the company’s name

Committee member’s consent to act and representative: I/we consent to act as a member of the committee and authorise [insert representative’s name here*] ______to represent me/us on the committee with authority to act generally.

* A creditor which is a company or other body corporate must be represented by an individual. A creditor who is an individual can be represented by another individual but does not need to be. If you don't insert the name of a representative, the nominated creditor can still be represented on any committee, but may need to provide a letter of authority to the representative before they can act. A representative may be authorised to act either generally or specifically. If you wish to authorise your representative to act specifically, please amend the authority above and state in what respect they are authorised to act.

This form continues on the next page

Name of Company Company Number D&J (Steels) Limited 06508325

In the Court case number High Court of Justice CR-2019-BHM-000713 Business and Property Courts in Birmingham Insolvency and Companies List (ChD)

I/we enclose my/our proof of debt (if not previously submitted)

Signature of creditor or person authorised to act on behalf of the creditor:

Name in block capitals:

______

Position with or relation to the creditor (e.g. director, company secretary, solicitor):

______

Date: ______

Common questions and answers about the decisions we are seeking, including the approval of the Administrators’ proposals

We are seeking approval of the Administrators’ proposals and other resolutions by way of a decision by correspondence.

A copy of the notice requesting decisions by correspondence are attached to the proposals and contain information relating to the decisions being sought and how creditors can vote.

We have answered some of the common questions which arise in respect of decisions by correspondence below. What is a decision by correspondence? A decision by correspondence is one in which the creditors vote on decisions and/or resolutions in writing.

In this case we are seeking a decision by creditors on the following matters:

 The approval of our proposals for achieving the purpose of administration;  The formation of a creditors’ committee;

Details of how creditors can vote on the decisions being requested are included in the decision notice attached to the proposals.

Creditors who (by themselves or with others) meet one of the relevant thresholds can request that the decisions be made at a physical meeting instead of by correspondence (see below). Do I have to vote on a decision being sought by correspondence? You don’t have to vote, and if you don’t want to, you don’t need to take any further action unless you wish to nominate a member of the committee should one be formed. How do I ensure that my vote counts? For it to be counted, a creditor’s vote must be received by us by 11.59pm on the decision date specified in the decision notice and must be accompanied by a proof of debt in respect of the creditor’s claim (rule 15.9(1)(b) IR16) unless the proof of debt has already been provided to the administrators. We have provided you with a form which you can use for this purpose. (Please see the decision notice for more information about submitting your proof of debt).

If any vote is received without a proof of debt, or we decide that the creditor isn’t entitled to vote, that creditor’s vote shall be disregarded (rule 15.9(2) IR16). How do I request a physical meeting (PM)? Creditors who meet one of the thresholds in section 246ZE IA86 may, within five business days from the date of delivery of the decision notice attached to the proposals, require a physical meeting to be held to consider the decisions detailed in that notice. The relevant thresholds are 10% in value of creditors, 10% in number of creditors or 10 creditors.

If one of the above thresholds for requiring a physical meeting is met we will issue a further notice calling a physical meeting and the original decisions by correspondence as detailed in our notice attached to the proposals will be superseded.

Details of how to attend and vote at any physical meeting called will be provided in the notice of that meeting. Who decides whether my claim ranks for voting purposes? The Administrators have the power to accept or reject the whole or any part of your claim for the purpose of voting and/or requesting a physical meeting (rule 15.33(2) IR16). If there’s any doubt whether your claim should be admitted, we’ll mark it as objected to and allow you to vote. If however, the objection is sustained, then your vote will be declared invalid (rule 15.33(3) IR16). If your vote was critical to the outcome, this could change the decisions/resolutions that were passed and/or result in a further decision being required (r15.35(3) IR16). What happens if I disagree with the Administrators’ decision on my claim? You’re entitled to appeal to the court for an order reversing the Administrators’ decision on your claim provided you do so within 21 days of the decision date (rule 15.35(4) IR16). If the court reverses or varies the Administrators’ decision, or votes are declared invalid, the court may order us to initiate another decision procedure or make such other order as it thinks just (rule 15.35(3) IR16).

You also have the right to appeal to the court if you believe that the Administrators are acting/have acted/propose to act in a way which unfairly harms your interests (paragraph 74(1) Sch B1 IA86).

We recommend that you seek legal advice about the merits of taking these steps in any particular circumstances. How do I calculate my claim for voting purposes? Votes are calculated according to the amount of a creditor’s claim as at the date on which the Company entered administration, less any payments that have been made to them after that date in respect of their claim and any adjustments by way of set-off made in accordance with rule 14.24 IR16 or that would be made if that rule were applied on the date that the votes are counted (rule 15.31(1)(a)(ii) IR16). What majorities are needed to approve decisions/resolutions? A decision to approve the proposals or any modification to them is made by creditors if more than 50% in value of those voting vote for the decision.

But a decision is not made if those voting against it include more than half in value of the creditors to whom notice of the decision procedure was delivered who are not, to the best of the convener or chair’s belief, persons connected with the Company (rule 15.34(2) IR16). What happens if I cannot yet quantify my claim with certainty? You can vote in respect of a debt for an unliquidated amount or any debt whose value is not ascertained, if the Administrators agree to put on the debt an estimated minimum value for voting purposes and admits the claim for that purpose (rule 15.31(2) IR16). What happens if my debt is wholly or partly secured? If you’re a secured creditor whose debt is wholly or partly secured, you’re entitled to vote only in respect of the balance (if any) of your debt after deducting the value of your security as estimated by you. However, if we’ve made a statement under paragraph 52(1)(b) Sch B1 IA86 (that we think the Company has insufficient assets for a dividend to be paid to unsecured creditors other than from the prescribed part) in our proposals and the

Company’s creditors ask us to seek a decision as to whether they approve the proposals , you can vote in respect of the full value of your secured debt without any deduction for the value of the security (rule 15.31(6)(a) IR16). What happens if I am a creditor under a hire-purchase, conditional sale agreement or leasing agreement? If you’re an owner of goods under a hire-purchase or chattel leasing agreement, or a seller of goods under a conditional sale agreement, you’re entitled to vote in respect of the amount of the debt due and payable to you by the Company on the date the Company entered administration. In calculating the amount of any debt for this purpose, no account shall be taken of any amount attributable to the exercise of any right under the relevant agreement, so far as the right has become exercisable solely by virtue of:

 the making of an administration application;  a notice of intention to appoint an Administrator or any matter arising as a consequence; or  the Company entering administration (rule 15.32 IR16). Am I bound by the Administrators’ proposals if they are approved? Our proposals, when approved by the creditors, will dictate how the Company’s affairs will be conducted in future and how creditors’ claims will be addressed.

For this reason, it is important that creditors properly consider our proposals and decide whether and how they wish to vote.

Proof of debt D&J (Steels) Limited - in Administration

Please complete and return this form with supporting documentation as soon as possible to Helena Perevalova, PricewaterhouseCoopers LLP, Central Square, 29 Wellington Street, Leeds, LS1 4DL

Creditors whose claims are secured or preferential (in part or in whole) should provide details of their claim to the above address. However, they need not use this claim form.

1) Name of creditor

2) Address of creditor for correspondence

3) Registered number (if creditor is a company)

4) Total amount of your claim (including VAT) and outstanding uncapitalised interest at the date the £ administration commenced* 5) Total value (including VAT) of any monies owed by you £ to the company in administration 6) Total amount of any payments received by you in £ relation to the claim after the administrators’ appointment 7) If the amount in 4) includes outstanding uncapitalised £ interest, please state amount 8) Particulars of how and when the debt was incurred (please attach a continuation sheet if more space is needed) 9) Particulars of any security held, the value of the security and the date it was given 10) Particulars of any reservation of title claimed in respect of goods supplied to which the claim relates 11) Details of any documents by reference to which the debt can be substantiated

12) Particular matters relating to the company’s purchase of goods and services from you or any other matters that you feel should be reviewed (please provide on a separate sheet if needed) Signature of creditor or person authorised to act on behalf of the creditor

Name in block capitals Position with or relation to the creditor (e.g. director, company secretary, solicitor) Address of person signing (if different from 2 above)

Date

For office holder’s use only If applicable Admitted to vote for: £ If applicable Admitted for dividend for: £ Date Date Signed Signed Name Name * You must deduct any trade or other discounts which would have been available to the company but for its administration, except any discount for immediate, early or cash settlement