Administrators note £22.8m 'deficiency' at Recycling Technologies

EXCLUSIVE: The administrator appointed at ‘plastics to oil’ company Recycling Technologies has found that the firm has a "deficit" of more than £22.8 million.

This means the company is likely to be dissolved while the administrators, Interpath Advisory, look to sell assets and pay those owed money. This includes Wiltshire council, which is owed £935,000 from the company.

And, Interpath Advisory has also said that Recycling Technologies’ main asset, the intellectual property for the RT7000 machine which it said converts difficult to recycle plastics to oil, is worth £176,000. Recycling Technologies had given this a ‘book value’ of more than £6 million.

Due to the £22 million deficit, the administrators "anticipate the likely exit route for the administration will be dissolution".

Interpath Advisory announced that Recycling Technologies had gone into administration in September (see letsrecycle.com story).

The amount of money owed to creditors emerged after the administrator published a statement of affairs yesterday (16 November).

We anticipate the likely exit route for the administration will be dissolution– Interpath Advisory

The statement sets out the "purpose of the administration and how we propose to achieve it".

It explains that there were 79 employees when the company went into administration, with six retained to assist the administrators. The remaining 73 were made redundant.

There was £417,672 in the company's bank, which has been transferred to the administrators. A total of £46,677 was paid to the six remaining staff members for their assistance in the process between September and October. Recycling Technologies’ total assets stood at £909,948 and include the company's machine, research and development equipment and cash at bank.

The administrators have incurred costs of £347,319 so far, based on an average rate of £461 an hour. It is estimated that the total fees and expenses will be £912,779.50 for the entire process.

The liabilities were listed as £22 million, with the bulk – £17 million – owed to Recycling Technologies Group, the holding company for Recycling Technologies set up last year.

The holding company was also placed in administration on the same day as the plastics to oil company, with £17 million of liabilities in the form of convertible loan notes given to Recycling Technologies.

A convertible loan note is a type of short-term debt that is converted into equity shares at a later date. Oil company Neste and asset management fund Mirova, among many others, spent a combined £8 million on loan notes.

Recycling Technologies was founded by its director Adrian Griffiths in 2011.

The company said that the machine it created, the RT70000, could transform plastic waste into a chemical feedstock called Plaxx, "which can be used in the manufacture of new, virgin quality plastic."

Recycling Technologies was funded through a number of different sources, including government grants such as £2 million from Zero Waste Scotland, equity investment and convertible loan notes. It also ‘crowdfunded’ more than £2 million.

Mr Griffiths previously claimed the Recycling Technologies process could turn the "most challenging of plastics wastes into valuable oils" via the RT7000 machine.

Mr Griffiths explained: "Our RT7000 machine will help feedstock recycling take off around the world. This will allow crisp packets, sachets, films etc to become widely recycled back into virgin quality plastics."

Letsrecycle.com visited the company in 2018, where Adrian Howorth, who was marketing and sales director at the time, addressed some of the criticisms of the company in the video below.

Adrian Haworth from Recycling Technologies, discusses his company's technology

Recycling Technologies was also due to install its machine in Scotland as part of an ‘advanced plastics reprocessing facility’ on the Binn Group's site in Perthshire.

Called ‘Project Beacon’, the plant was to see three companies including Recycling Technologies work together to "chemically recycle" plastics to make new material or other chemical products. It has been delayed several times despite being meant to be operational in 2018.

Recycling Technologies was placed into administration last month after it had tried to raise between £20 million and £30 million by listing on the stock market, but there was "insufficient confidence" in this success. Mr Griffiths stepped down in April 2022.

In July 2022, the company attempted to raise money through investments, administrator documents show, but "whilst a number of parties undertook detailed due diligence, no deliverable offers were made".

Among those listed as those who are owed money are: Wiltshire council (£935, 433), Binn Farm Ltd (£25,21), Swindon borough council (£15,593) and the Chartered Institution of Wastes Management (£515).

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