Typhoo Tea owed creditors close to £100m at the time of its collapse late last year, with its private equity owner taking a massive hit, new documents from administrators have revealed.
London-based Zetland is not expected to see a repayment for the £65.6m it is owed by Typhoo, according to the report by Kroll.
The report showed Karalius, the special-purpose vehicle used by Zetland to acquire Typhoo in 2021, released its security over the tea supplier’s business and assets to allow the pre-pack rescue deal struck by Supreme to go ahead in December. As such, the PE firm is ranked as an unsecured creditor and is not expected to be repaid.
Lender Axis was also owed £18.4m when Typhoo entered administration but has received £7.2m back so far. It is not expected to be made whole following the pre-pack.
Unsecured creditors totalled £7.3m, made up of £2.5m owed to trade suppliers and a shareholder loan of £4.8m. There is not expected to be a distribution for the unsecured creditors.
Publicly listed vape maker Supreme rescued Typhoo in a £10.2m pre-pack deal last year after the tea business ran out of money.
Typhoo battled for a number of years to turn around the business following a structural downturn in the traditional black tea market, amid other challenges.
Zetland brought in a new management team in 2021 in an attempt to transform Typhoo into a healthy business.
Progress was made with a reduction in the cost base, unprofitable product lines exited, new products launched and a repositioning of the Typhoo brand. However, losses continued to mount on falling sales.
In the year to 30 September 2023, progress was derailed as trespassers broke into its mothballed factory in Merseyside. The extensive damage to the site led to one-off exceptional costs of £24m and pushed the company to a loss of almost £40m.
It put losses racked up by Typhoo since the 2017/18 financial year at more than £120m. Revenues had also tumbled from £82m in 2014/15 to just £25.3m.
Kroll’s administration report, filed this week, also revealed revenues declined further in FY24 to just £20m, with further trading losses incurred.
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