Pellet and Biogas Energy Facility

Moorfields were appointed as Administrators over 3F Pellets Limited a Lincoln-based manufacturer of wood-based pellet products, including cat litter, horse bedding, and biomass heating pellets.

Established in 2015, the company had invested heavily in machinery and equipment to expand into the bioenergy sector. However, it faced significant financial challenges after struggling to gain sufficient market traction, resulting in an inability to service its secured debt.

Moorfields were appointed as Administrators on 22 February 2023, tasked with managing the business’s affairs, protecting asset value, and achieving the best possible outcome for creditors.

Objectives

• Maximise realisations from the company’s specialised plant, machinery, and renewable energy assets.
• Preserve asset value during the Administration period.
• Conduct an open and transparent marketing process to attract interest from potential buyers.
• Secure a sale that would deliver strong recoveries for creditors.
• Ensure compliance with all legal and regulatory requirements during the transaction.

Moorfields’ Actions

• Instructed agents to conduct an extensive marketing campaign, targeting a wide network of companies and individuals in the energy and manufacturing sectors.
• Marketed the company’s bespoke plant and machinery, as well as two Renewable Heat Incentive (RHI) accreditations, as part of the sale opportunity.
• Coordinated with legal advisers to manage the sale process and ensure compliance with insolvency regulations.
• Negotiated and accepted an offer from Flush Energy Limited on 26 May 2023.
• Successfully completed the sale on 28 July 2023 for a total consideration of £4.25 million.

Results

• The sale of the business and assets was successfully completed to Flush Energy Limited.
• A substantial sale price of £4.25 million was achieved, reflecting strong market interest in a unique asset base.
• Creditor recoveries were maximised through the efficient sale of high-value plant and renewable energy assets.
• The process demonstrated Moorfields’ ability to deliver successful outcomes in the renewable energy and manufacturing sectors, even in challenging market conditions.