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Last Updated: Friday, 30 March 2007, 16:45 GMT 17:45 UK
Collapsed firm 'has 24m debts'
Simclar protest
Workers for Simclar staged protests after the closures
A report into the closure of two Ayrshire electronics factories has suggested the company is unable to pay debts totalling 24m.

Simclar Group closed facilities in Irvine and Kilwinning with the loss of 420 jobs in January.

In the report, administrators Kroll said they had a duty to "consider the conduct" of Simclar directors.

Simclar founder Sam Russell said the report had been "misinterpreted" and actual debts were around the 6m mark.

Irene Oldfather MSP, who was handed the report, said the debts would affect many other small businesses across Scotland.

The report said that following payments to secured creditors of some 84,000, and the 250,000 cost of the administration process, Simclar (Ayrshire) was unable to pay the remaining debts owed.

'Difficult to comprehend'

Ms Oldfather hit out at Simclar Group, which she accused of transferring assets to its Dunfermline headquarters.

"Given the sale and transfer of assets in the weeks before closure, it is perhaps not surprising that there are insufficient funds to pay the creditors," she said.

"If this is legal, then the law must be changed."

She said many businesses across Scotland would not be paid due to the collapse of the company.

"It is difficult to comprehend how a company who only two years ago were recording million pounds worth of profits can now be in 24m in the red," MS Oldfather added.

Almost 17m of this figure refers to future rental for the premises which we occupied in Irvine
Sam Russell
Simclar founder

A spokeswoman for Kroll, the administrators for Simclar (Ayrshire), said: "We are aware of the concerns that Cunninghame South Labour MSP Irene Oldfather has raised and would be happy to help address these concerns with her directly as necessary."

Mr Russell also offered to meet Ms Oldfather to discuss the situation.

He said: "The 23.9m referred to in the Kroll report and described as being due to unsecured creditors, while legally correct, does not paint an entirely true picture.

"Almost 17m of this figure refers to future rental for the premises which we occupied in Irvine.

"The longevity and cost of the lease was one of the major contributing factors to our decision to place the Ayrshire business in administration."

He added: "I wouldn't seek to downplay the effect of the administration on our workforce or suppliers but taking the future lease liabilities out of the equation means that unsecured liabilities amount to some 6m.

"Now this is still a significant figure and is to be hugely regretted, but it is light years away from 24m."

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