Plumbing and maintenance business Kinetics Group owed millions to creditors when it was forced out of business earlier this year.

Kinetics Group, which operated throughout the UK from sites in Liverpool and Manchester, collapsed twice during the month of June earlier this year, leaving hundreds of people out of work.


The business provided a 24-hour emergency service to more than 250,000 social housing properties, schools and public buildings.


The group entered administration after incurring "substantial liabilities" due to HM Revenue & Customs (HMRC) and its largest supplier.


Administrators from insolvency firm Zolfo Cooper were appointed in June and subsequently sold certain assets to a new company called SCP Renewable Energy for £12.6 million in a pre-pack deal.


Although the group then continued to trade, it ran into further trouble after housing clients pulled their contracts. There was also confusion regarding the solvency of subsidiary companies and delays in payments from customers. After the company's credit insurance cover was removed, some suppliers also refused to continue trading with it.


Begbies Traynor was called in on 13 July as administrators of SCP Renewable Energy and subsidiaries Sureway Gas, Kinetics Midlands and Kinetics South. This second administration resulted in approximately 550 redundancies over five sites, although some of these staff have since been transferred to other businesses including Liverpool Mutual Homes and Mouchel.


A report now published at Companies House has revealed Kinetics Group was facing considerable pressure from creditors in the run up to the first administration, and subsidiary Seaflame had been issued with a £1.7 million winding-up petition from HMRC.


Zolfo Cooper's update to creditors said the group collapsed owing Sovereign Capital £49 million after the firm bought Kinetics' debt from Yorkshire Bank in April.


The report added that HMRC was owed about £10 million at the time of the pre-pack deal in June, while trade creditors were owed approximately £7 million.