The factory site of Tillery Valley Foods - which was put into administration last month with the loss of 200 jobs - will shortly be brought to market, its owner has confirmed.
The freehold ownership in the 120,000 sq ft factory and nearly seven acres of land in Abertillery was acquired last December by a company called Cable Property Management (PM). According to the Land Registry, Cable PM - whose directors are Abraham Gelley, Charles Edward Blackbourn and Eliot Mosafi - paid £1.5m for the freehold interest and then leased the site back to Tillery Valley Foods.
The three are also directors of food group Joubere which acquired Tillery Valley Foods in 2020. Joubere is backed by private equity firm Cable Capital Partners, for which the three are also directors.
Abertillery-based Tillery Valley, which supplied food to the NHS and schools, blamed the administration on spiralling energy and food costs. A sale of the business through a potential management buyout (MBO) was explored, but failed to materialise. Having the freehold interest was seen as key to supporting an MBO with fundraising. The Welsh Government had also been supportive of a potential MBO.
Tim Bateson and Will Wright from insolvency practice Interpath Advisory were appointed joint administrators to the business. What creditors will get back and the total amount owed has yet to be determined. However, the land and factory are not part of the administration process as they are assets held by Cable PM.
Cable PM said the sale and leaseback deal with Tillery Valley Foods had provided much needed working capital for the struggling food business which was established in the 1980s.
In a statement Cable PM said: “The directors of Tillery Valley Foods retained a national firm of property agents to value the property in December 2022 and the transaction took place at that price.”
It confirmed that the £1.5m went to Tillery Valley Foods in a one-off payment with the rent agreed at the headline level set out in the valuation report. The deal also provided an initial rent-free period of six months.
However, Cable PM confirmed that not all of the £1.5m it paid for the site was deployed as working capital by the food company, with part of the proceeds used to pay off existing loans.
Tillery Valley Foods’ accounts for the financial year to end of July, 2021, show it secured a £2m loan from a company called GQS Finance, for which the three directors of Cable PM are also directors. In August of that year £1.5m of the loan to GQS Finance was repaid through a new lending facility provided by Arbuthnot Commercial Asset Based Lending.
At the time of going into administration Tillery Valley Foods hadn’t started to pay rent to its landlord.
On the rationale for the sale and leaseback deal with Tillery Valley Foods, Cable PM said: “It provided the company with urgent liquidity in line with the financial projections produced by Tillery Valley Foods at the time. A lease was agreed at the headline rent per the valuation report, with an initial rent-free period to support Tillery Valley Foods’ trading position. No rent was paid.”
On a separation of interests on the property deal between the food company and Joubere and its private equity backers, Cable PM added: “The board of Tillery Valley Foods acted independently at all times and did not require any approvals (from Joubere or Cable Capital Partners).
On its plans for the factory and land, if it intends to seek a buyer and at what price it could be marketed for, Cable PM said: “We have yet to engage agents to market the site, but will do shortly. We will work with any interested parties with the hope that an occupier can be found who will use the site to return employment to the town.”
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