20 finance/corporate recovery


Santander boosts business support


Santander Corporate & Commercial is strengthening its support for local businesses and extending its presence in Oxfordshire and the Thames Valley with the opening of a new corporate business centre in Oxford.


The move is part of Santander’s strategic plan to grow its presence across the UK and demonstrates its commitment to the region’s small and medium- sized businesses following steady growth to establish a local presence over the past three years.


A team of four corporate and commercial relationship bankers will be based at the new centre, providing a bespoke relationship banking service to corporate and commercial customers with a turnover above £250,000. Customers will be offered a full range of banking services, including asset finance, trade finance, invoice discounting, treasury and merchant acquiring.


The team is led by Cheryl Adams, regional director for Thames Valley, and is made up of three relationship


directors: Justin Hayward, Kevin Farrell and Dorothea Dunn, while Adams is also currently recruiting for an additional relationship banker in the region. The team are all local to the area and together have more than 70 years’ banking experience. Customers will also have access to specialist product partners including experts in real estate, education and healthcare and asset-based finance.


Adams is focused on growing the business in the local area and increasing lending. In the year to the end March 2013, Santander grew lending to small businesses in the region by 15%, providing £76 million of new funding to smaller firms in the Thames Valley area.


Adams said: “We are delighted to be able to provide extra dedicated support to local businesses in Oxfordshire and this new centre means we are ideally placed to support the region’s high proportion of successful and growing small and medium-sized businesses.


“We are focused on growing our business lending and supporting the companies which make up the backbone of the local economy. We already have some great business customers in the area, and are thrilled that we will now be able to increase the time we spend with both existing and new customers.”


Details: www.santandercb.co.uk


KRE Corporate Recovery appointed administrator


Reading-based recovery practice KRE Corporate Recovery has been appointed as administrators over TLE, a leading provider of pre- employment training.


TLE, based in Harrow, Middlesex, delivers basic-level qualifications and progression routes to employment for around 15,000 learners per annum from eight locations.


KRE Corporate Recovery’s Paul Ellison commented: “We are delighted to announce that the sale of the business,


www.businessmag.co.uk


excluding certain contracts, was concluded immediately following our appointment to a subsidiary of Learndirect, and all 230 employees have transferred to the purchaser.


“All of the company’s locations will remain open and this is an excellent demonstration of why pre-packaged sales from administration will continue to have a place in rescuing businesses.”


Details: www.krecr.co.uk


The insolvency test


David Kendall of Penningtons Solicitors LLP considers the definition of insolvency in the light of a recent Supreme Court decision


The Insolvency Act 1986 itself does not define insolvency. Instead the Act uses the expression “unable to pay its debts“. This is specified in section 123 of the Act. The definition sets out certain circumstances in which a company will be deemed to be unable to pay its debts, including:


• where a company is unable to pay debts as they fall due (commonly referred to as the cashflow test); and


• where the value of a company‘s assets is less than its liabilities taking into account contingent and prospective liabilities (commonly referred to as the balance sheet test).


A company may be cashflow solvent but balance-sheet insolvent (or vice versa). Some companies operate permanently in this state particularly where a company has sufficient revenue to pay its debts as they fall due (and so is not cashflow insolvent) but is balance sheet insolvent as its liabilities exceed the value of its assets.


The recent Supreme Court case, BNY Corporate Trustee Services and others vs Eurosail-UK 2007-3BL PLC and others [2013], concerned loan notes which included the issuer not satisfying the balance sheet test as an event of default. Although the issuer continued to pay its debts as they fell due, some noteholders argued that it had become insolvent on the balance sheet test.


The Supreme Court decided that the cashflow test is relevant in relation to the company‘s current debt as well as debts falling due in “the reasonably near future“. What constitutes the reasonably


THE BUSINESS MAGAZINE – THAMES VALLEY – JULY/AUGUST 2013


near future will depend on all the circumstances. Where it is necessary to move beyond the reasonably near future any attempt to apply the cashflow test is purely speculative, and the balance sheet test “becomes the only sensible test“.


The court held that the balance sheet test is not a simple mathematical exercise and that whether or not the company “had reached the point of no return“ was not the appropriate question. Instead, whether or not the company is balance sheet insolvent would depend on all the available evidence as to the circumstances of the case. The court must assess whether the company can reasonably be expected to meet its liabilities, looking at the assets and making proper allowance for prospective and contingent liabilities.


In the BNY case


the assets of the issuer were affected by “imponderable“ factors and its liabilities could be deferred until 2045. In these circumstances the court could not be satisfied that the company was unable to pay its debts.


Details: David Kendall 01483-791800 david.kendall@penningtons.co.uk www.penningtons.co.uk


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