Modulous goes into liquidation after search for buyer hits buffers

Failed modular housing business Modulous has gone into voluntary liquidation, nearly two months after laying off its staff.

A letter sent to former Modulous employees last Friday from liquidator Opus Restructuring confirming the move, and seen by Building’s sister title Housing Today, invites them to attend a virtual creditors’ meeting on 8 February. It also asks them to approve the liquidators’ fees of £27,260.

The move comes almost three weeks after Modulous’s chief executive Chris Bone said the business would collapse into administration but the paperwork wasn’t subsequently filed.

All 50 staff at the off-site housing firm were made redundant at the end of November and the firm issued a notice of intent to enter administration.

But the notice was extended more than once as Modulous attempted to find a buyer for some of its assets.

An email sent to staff yesterday morning (Monday) from Bone admitted a deal had fallen through. He said that since 6 December he had been in negotiations with “a business which was interested in buying our software as it will be a synergetic bolt-on for them,” adding it was “a deal which has, for a number of reasons, taken some time to close”.

However, he went on: “Unfortunately, in the last week, it became clear that some additional risks to the business had arisen and, as a result, the buyer felt that they would prefer not to acquire the business out of administration and left the board no alternative but to quickly move to liquidation proceedings.”

Bone wrote that Modulous had appointed Opus to undertake the preparation for liquidation on Friday afternoon.

>>See also: Modular without the factory: Modulous’ plan to turn offsite building on its head

He told Housing Today he was “nothing to do with the delay entering administration. I have been the one pushing the deal through. Sadly just not as quickly as everyone needed.”

In early January, Bone confirmed that the firm collapsed with debts of £4m. Staff have not received final salaries for November and are believed to be owed four months of pension contributions.

Bone’s reference in his email to a deal to buy the firms’ software “out of administration” comes despite Opus and the Insolvency and Companies List, formerly known as the Bankruptcy Court, confirming last week that the firm was not formally in administration.

Founded in 2018, Modulous consisted of a physical kit of parts that could be used to deliver housing, and a digital design tool called TESSA – an acronym for Tech Enabled Solutions for Sustainable Architecture – which launched in October, and is believed to have been the subject of the deal referenced by Bone.

Bone blamed “the vagaries of the venture capital markets” for the collapse, claiming it had had £30m of pledged funding but when one funder pulled out the remainder stalled meaning the business “couldn’t bridge the gap”.