Renewables firm collapses owing nearly £50m

A renewable energy subsidiary of housing and construction group Larkfleet has filed for liquidation, owing £48.6m to creditors.

Documents filed at Companies House on 17 July show that the business formerly called Lark Energy, and renamed as Renewables Solar (UK) on 8 June, has appointed PKF Cooper Parry as its voluntary liquidator.

Associated companies Renewables Solar (UK) Construction, Renewables Solar (UK) Commercial and Barnby Moor have also filed for liquidation.

All 28 employees at the four firms have lost their jobs.

A new company, also called Lark Energy, was incorporated on 20 May by Larkfleet Group chief executive Karl Hick.

A creditors’ committee was established on 18 July and members included G2 Energy, Modus Utilities, Barker Ross Recruitment and the liquidated company’s parent Larkfleet.

The former Lark Energy posted a turnover of £87m and a pre-tax profit of £1.6m in its last filed results, for the year to 31 December 2015.

Established in 2009, the company provided commercial and utility scale renewable energy schemes, including solar photovoltaic panels, biomass, gas-powered generation and waste-to-energy plants. Acting as both principal developer and contractor, it expanded on the back of the government’s feed-in tariff scheme for renewable energy.

Tyrone Courtman, partner and head of PKF Cooper Parry’s business restructuring, recovery and insolvency services team, said: “Unfortunately, despite efforts to save the business, due to a severe lack of cash there was no other option but to place the company in creditors voluntary liquidation.

“Renewables Solar (UK) was a market leader in the renewable energy sector. However, unfortunately, like many other companies in the sector, it was a victim of the changes the government made to feed-in tariffs in 2015, which had a major impact on the industry.”

Courtman also said that “the company suffered significant losses on a number of major projects as a result of the engaged sub-contractors failing to complete the necessary works by the agreed deadlines”.

He added: “These losses, when combined with the loss of business as a result of the changes within the industry, resulted in the eventual collapse of the company.

“Regrettably, we were unable to save any of the jobs and it is unlikely that we will be able to realise sufficient assets to repay all the monies owed to the company’s creditors, but we remain hopeful that there will be a partial return to creditors.”

A spokesman for Lark Energy said: “I can confirm that a number of people have lost their jobs as a result of re-organisation. This is clearly a blow to our former colleagues who are now unemployed and we will do all that we can to assist them in finding jobs elsewhere.

“The state of the industry, resulting from cuts in government support for solar power, mean that our group companies Renewables Solar (UK), Renewables Solar (UK) Commercial and Renewables Solar (UK) Construction will cease trading. These businesses have been trading unprofitably for some time and the losses have become unsustainable.

“Existing contracts supporting customers in, for example, the operation and maintenance of solar power farms will continue without interruption to the service.”