52 jobs saved as boss buys crisis-hit Sheffield firm
A Sheffield payments company has been rescued after the founder bought the firm out of administration, saving all 52 jobs.
Ashley Tate stumped up £100,000 to buy Split The Bills after he was forced to put it into administration following a row with an energy supplier.
The firm handles utility and television licence payments in shared student houses and forwards the cash to suppliers.
The 27-year-old said an energy firm threatened to issue a winding up order, which forces an insolvent company into compulsory liquidation, after he queried a demand for £900,000.
He claims the figure was based on estimated bills and insists the true total, based on meter readings, was closer to £200,000.
After six weeks of discussions, and amid mounting legal bills and costs of more than £50,000, he called in administrators.
He said: “We’ve had a very close shave. I was running a very successful company and it came out of the blue, it’s left me shaken.
“We tried to negotiate but we were ultimately backed into a corner by a business with very deep pockets.
“They had wanted us to pay the full amount and refund the money if the estimated amount was incorrect.
“It’s a relief to be on the other side having saved everyone’s jobs and customers fees - all could have been lost in the administration. I’m very pleased to say it’s business as usual.”
Mr Tate said he found funds for the sale from another business he set up, student lettings company Fit Property.
He bought Split The Bills the day before a £90,000 wage bill fell due.
The deal saved all 52 jobs at the company based on Darnall Road and ensured all staff were paid.
All the other suppliers - including Virgin, Sky and Spark Energy - where continuing to support it, he added.
“The lesson I learned is to do more due diligence and be a lot more careful about what we are putting our name to. We’ll scrutinise every clause and every detail in a contract in future.”
Split The Bills grew 70 per cent in the last 12 months to £2m turnover and 11,000 customers, Mr Tate said. By the end of October and the start of the new academic year he hoped to have 20,000 customers.
The firm had been in discussions with potential investors before the administration and he hoped they could now proceed.
Following its success in the student market, Split The Bills is set to target homes shared by professionals, especially in London.
Mr Tate added: “I definitely think there’s a great opportunity. Prior to the administration there was a very definite possibility of two investment deals in the business. They were on hold, I hope they can now proceed.”
Administrator Paul Whitwam, of BWC Business Solutions, said: “There was a contractual dispute with an energy supplier who threatened to take action.
“Split The Bills was faced with a monetary claim the company couldn’t satisfy. Ashley Tate felt he had no alternative but to go down this route. There was a pre-pack sale of the company on Thursday to a new company STB2016.
“The key thing was to get the business sold.
“Jobs have been saved and in this climate that’s quite a priority.”