Ecotec went into administration on 27 October 2022, with a total ‘deficiency’ of £2.9 million noted, including debts to Barclays, Close Brothers and HMRC.
The deemed approval notice was published by the administrators, Begbies Traynor, and signifies that there were no objections from creditors to the draft proposals set out last month.
These proposals also recommended that the company be dissolved once its assets have been divided.
RHI
Ecotec Services Ltd was founded in 2009 and originally installed biomass boilers for the agricultural sector, taking advantage of companies able to use the renewable heat incentive (RHI) support scheme.
According to the administration documents, the company then began to sell biomass boilers to the waste sector, where companies could use the heat to “dry fuel and reduce costs to landfill”.
The document added that more than 20 boilers were added to waste sites, some with electricity generation.
“However, in 2018 the government announced that the RHI tariff was ending on drying, and stopping altogether in 2020,” the administrator added.
Alternative markets
It then looked to develop a small-scale RDF plant which could be sold to customers in around 2018/19.
However, the administrators said this project faced a number of difficulties.
The project went through technical due diligence and the company started to identify sites. However administrators noted the high apex value, cost of borrowing and excessive planning regulations as reasons it was difficult to locate sites.
This was exacerbated by Covid when people put off investment decisions and planning “taking even longer”.
While the directors tried to kick start sales again by signing three big contracts for a biomass systems, in April 2022 they identified that debt was beginning to become difficult to maintain.
It moved into solar panels, and had developed a pipeline of around £30 of investment, but rising costs of materials made the project difficult to deliver.
The final nail in the coffin, according to the administrator, was “the government’s disastrous mini-budget”, which the company said made investment decisions harder and created uncertainty.
In October 2022, the decision was made to place the company in administration.
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