What now for the Avocet empire?

by DOUGLAS SHEPHERD

The recent collapse into insolvency of Omega Infinite PLC, the Borders farming and fuel production business which impressed and persuaded hundreds of willing investors to part with £17 million casts a shadow over the future of almost 30 "subsidiary" limited companies bearing the name Avocet.

Until last October Omega Infinite had been trading as Avocet Infinite, active in the world of venture and development capital. Two months earlier one of the offshoots Avocet Farms morphed into Orrdone Farms before crashing into administration this January after apparently failing to repay a £3.2 million loan used to purchase farms in Berwickshire.

But these are just two of the entities which form an intricate network of firms involving businessman Martin Frost.who is listed as a director of all of them.

According to Omega Infinite's books the direct subsidies are Avocet IP Ltd (intellectual property ownership), Avocet Faculties Ltd (property ownership), Avocet Agriculture Ltd (intermediate holding company), Avocet Fuel Systems (development and manufacture of fuel products), Avocet Solutions Inc. (development of fuel), Avocet Infinite Solutions Ltd (dormant), Avocet Infinite Renewables Ltd (development and implementation of renewable energy infrastructure) and Avocet Bio Solutions Ltd (dormant).

A list of 'indirect' subsidiaries is also included in the Omega (Avocet) Infinite files for 2017. They are Avocet H2O Ltd (development and sale of hydroponic farming equipment), Avocet Aeroponics Ltd (investment holding), Avocet Inc. (dormant), Avocet Farms Ltd (now Orrdone Farms in administration), Avocet Infinite Foods Ltd (dormant), Avocet Propellants Ltd (manufacture of fuel products), Avocet Fuel Ltd (dormant), Avocet Renewable Operations Ltd (dorman), Avocet Marine Ltd (dormant) and Avocet Research Developments Ltd (dormant).

But that only tells the story up to the end of 2017. Since then at least another eleven new companies have been formed, many of them obviously geared up to help the Group secure a global presence, as Mr Frost and fellow director Dr Bob Jennings described in media interviews.

The third batch of firms in the flock of Avocets are The Avocet Clearing House Ltd, Avocet Middle-east Ltd, Avocet China Ltd, Avocet India Ltd, Avocet East Asia Ltd,Avocet Pakistan ltd, Avocet Russia Ltd, Avocet Japan, Avocet Berwick Ltd, Avocet Americas Ltd and Avocet Africa Ltd. But it would appear many of these Avocets will never get off the ground.

Meanwhile Mr Frost is also chairman of AFS Ventures Ltd, a business which has been the subject of a Voluntary Winding up process since January 2015. The main activity of the company was recorded as 'innovative fuel' although it functioned for less than a year before joint liquidators from KSA Group in Gateshead, Tyne and Wear were appointed.

Company filings at Companies House show that in January 2015 Mr Frost and fellow director Andrew Orr signed a Declaration of Solvency solemnly declaring the company would be able to pay its debts with intent within 12 months. The Declaration claimed AFS Ventures had intellectual property worth £4 million with total liabilities including creditors of £2.85 million and an estimated surplus of £1.156 million.

Joint liquidator Eric Walls in the first of five reports to creditors in 2015 claimed the Winding Up was expected to be completed within six months. But it has still not been finalised.

In his latest report Mr Walls wrote: “Considerable funds have been loaned to the Company in liquidation in respect of the sale of the business and intellectual property of the company to enable the liquidators to pay costs and creditors. Although the directors of the company had placed an estimated value on assets in the Declaration of Solvency, signed at the time of liquidation, the final level of consideration to be paid had never been agreed”.

The value of loans received re-deferred consideration is given as £790,000. The “various parties” involved in negotiations to acquire the business have not been identified in any of Mr Walls’ five reports between 2016 and 2020. “Commercial sensitivity” is cited.

However, Mr Walls warns: “The liquidators now have some considerable concern as to whether this final level of consideration [for the business] will be paid. The issues listed are of grave concern to the liquidators.

“It may be necessary to convert this liquidation from a solvent liquidation to an insolvent liquidation. If this does prove necessary, then this could have serious consequences for the company’s directors and for its shareholders”.