A Devon-based global security firm that provided armed protection for ships threatened by pirates has collapsed into administration with debts of more than £9m. DG Risk Consultants Ltd has offices in Exmouth, the USA and West Africa and in recent years boasted an annual turnover of more than £2m.
But it was badly affected by the coronavirus pandemic which stopped it sending its vessels out to sea and also prevented shipping - and pirates - operating off Africa. It meant the company eventually had to call in administrators who don’t think the company can be saved and expect that millions of pounds in debts will end up unpaid.
Documents filed at Companies House say it is predicted that there will be debts of more than £9m, with little cash to pay them. DevonLive has contacted DG Risk but has not yet received a response.
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On its website DG Risk said it provided a “bespoke, efficient and cost effective armed maritime and land-based protection capability across West Africa. The “global risk and security management consultancy”, whose senior management team has extensive military and commercial experience, has offices in New Jersey and Port-Harcourt, in Nigeria but the nerve centre was in Exmouth.
DG Risk was set up in 2014 to provide security and protection for clients with land and maritime assets around the world. It also leased vessels and was involved in marine salvage, transport and construction and specialised in working with clients in “high-risk and complex” environments.
The company, initially funded by loans and shares, was successful for several years but ran into trouble when the Covid pandemic arrived. Cancellation and delays to its clients’ projects hit the firm, and also there was a reduction in pirate activity off West Africa.
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It meant the company couldn’t earn enough money to pay off its debts and loans. It had bought five vessels and when operations were shut down still had to pay maintenance and holding costs.
It took out a £1.122m Coronavirus Business Interruption Loan Scheme (CBILS) loan from NatWest Bank. But even after Covid, it found investors had lost confidence and three of its vessels were seized because loans had not been repaid. In 2020, the company had a turnover of £2.9m but still made a loss of £187,311, after losing £496,956 the year before.
Directors decided to put the firm into administration. Administrators at insolvency consultancy Leonard Curtis, in Taunton, have submitted a document to Companies House containing their proposals, which have to be decided on by creditors by April 18.
The administrators’ documents show two boats have been sold to an unrelated Nigerian company for £116,572 which is likely to be the only cash clawed in from assets. So in total it is estimated that creditors will be short of more than £9m
NatWest is the only secured creditor but is unlikely to get the £1.122m it is owed in relation to the CBILS loans. Three employees are owed £8,762 in unpaid holiday pay but are likely to receive this. The company also owed £439,023 in unpaid VAT and Income Tax and HM Revenue and Customs is expected to receive “a modest dividend”.
Unsecured creditors are owed the bulk of the debt, £7.564m, which includes a £6m loan from Gibraltar-based SWM Offshore Ltd and claims totalling £78,625 from three employees in unpaid redundancy and compensation claims. This will be paid to the workers by the Government’s Redundancy Payments Service which will then try to get the money back from the company. However, this is unlikely as it will form an unsecured claim.
Among trade creditors, accountancy firm Francis Clark, in Torquay, is owed £49,000, Exeter ’s IT Champion Ltd is owed £1,851, and Protection Vessels International, in Exmouth, is claiming £3,959. The administrators said: “At present it is considered unlikely that there will be sufficient funds available to enable any form of distribution to unsecured creditors.”
