Liquidators back again 35 years later

by EWAN LAMB

A "visionary entrepreneur" who vowed to change the face of modern farming before his business had liquidators appointed last month suffered a similar fate 35 years ago shortly after he touted plans for a Scottish Woollen Craft Village designed to attract 30,000 visitors a year to Newtown St Boswells.

Martin Frost, described by the Berwickshire News in 2018 as principal director of Avocet Infinite PLC (now known as Omega Infinite), told the paper his company was using disruptive technology to revolutionise food and fuel production on farms in Berwickshire.

Following a site visit to one of those farms Councillor Mark Rowley, Scottish Borders Council’s executive member for business & economic development, was quoted in the 'Berwickshire' as saying: “The model is fascinating, I hope it will bring significant investment and employment to the Borders. Berwickshire has an exceptional reputation for agricultural innovation; from James Small’s revolutionary plough to the innovations of liming and marling that were pioneered here.”

“It is exciting that such new and innovative techniques are now being pioneered by Avocet and local farms here in the Scottish Borders almost 300 years later.”

And when some of Avocet's 650 shareholders expressed their concerns about the business's situation to The Sunday Times, Ken Stewart, chairman of Africa Forum Scotland described Mr Frost as a 'visionary entrepreneur'. 

But within a matter of weeks there were moves to have Avocet Infinite and a subsidiary, Orrdone Farms Ltd. wound up. The latter named firm is now in the hands of administrators with estimated debts of £3.8 million. Liquidators were appointed to the parent company in April by the 'Secretary of State'.

Councillor Rowley's enthusiastic reaction to Mr Frost's claims for the future of farming contrasted sharply with the action taken by his local government predecessors in 1985 when one of Mr Frost's entities in the textile industry defaulted on its business rates.

In a no-nonsense attitude towards its creditors Borders Regional Council (BRC) which delivered local services between 1975 and 1996 moved to close the company down.

The 'get tough' approach resulted in BRC  petitioning the Court of Session to have Mr Frost's textile business placed in liquidation and wound up.

A Hall (1982) Ltd., based at Langlands Mill, Newtown St. Boswells and within sight of the council's HQ, owed the authority more than £5,000 (about £15,000 in today's money).

 Straight-talking Councillor George Dorward, a retired senior police officer, and vice convener at BRC in 1985 told The Scotsman newspaper: "This is another example of the council's intention to crack down and adopt a hard line with people who get behind with their rates. We have to take a firm stand to be fair to those ratepayers who pay on time".

The Scotsman's report also mentioned the fact that two other companies in which Mr Frost was principal shareholder had recently gone into liquidation..

A Hall (1982) Ltd. was formed after Mr Frost acquired Langlands Mill, a collection of Victorian properties, from a receiver appointed to a 100-year-old spinning company.

Plans were announced for expansion of the mill including the creation of 45 jobs and the establishment of the Scottish Woollen Craft Village which was to transform the local tourist industry.

But Hall's soon encountered financial problems and the entire workforce at the reconstructed business

was made redundant in November 1984. Several months later former employees claimed they were still due thousands of pounds in wages, holiday pay and redundancy money.

Langlands Mill received another visit from insolvency specialists in 1998,this time to a company named Thomson Ecosse Ltd. That firm was the target for a petition to the Court of Session by the Lord Advocate for and on behalf of the Commissioners of Inland Revenue. 

'Pioneering' fuel product had been around for 40 years

by DOUGLAS SHEPHERD

The insolvency of Borders-based Omega Infinite, the company which claimed to be producing an environmentally clean fuel for all forms of transport means development of the 'Avocet' brand of additive will have to be abandoned for a second time.

Far from being a new idea, the 'green' fuel being promoted by Omega's directors over the last five years was a resurrection of the chemical technology first invented in South Africa in the 1980s, and taken on a stage by the mighty Imperial Chemical Industries (ICI) Corporation.

Even ICI could not make 'Avocet' financially sustainable, and the patents and trademarks held by the conglomerate in the USA and the UK were ultimately surrendered more than 20 years ago.

Investors in Omega Infinite (previously known as Avocet Infinite) clearly thought the additive would prove to be a winner second time around. But as we have been reporting, the company has had liquidators appointed by 'The Secretary of State'.

Dr Bob Jennings, one of Omega's directors, has been party to a number of patent applications linked to the fuel together with Glyn Short, an alternative energy consultant based in Hockessin, Delaware. The two inventors also submitted plans for an alcohol-fuelled combustion engine using an ignition-improver additive in 2014.

However, 'Avocet' had its roots in Johannesburg in 1979-80 when four scientists from AECI Ltd., a subsidiary of ICI, lodged a patent application in the United States.

The story of 'Avocet' is told in a 2001 scientific paper entitled Avocet: Not For The Want of Trying.

According to the paper:"The additive is an 'ignition improver' which allows methanol to be used as a fuel in existing diesel engines with a minimum of modifications. AECI were motivated to increase local consumption of methanol made from coal feedstock; coal-derived methanol was being promoted as a fuel in response to the difficulties South Africa then had (as a pariah state) in guaranteeing supplies of imported oil for fuels."

Authors of the paper, Lloyd Dale, Philip Gamlen, Ken Green and P. Groenewegen described how the world-wide patents were licensed to AECI's parent company, ICI (UK), who took on the product development in the mid-1980s.

"The main market for the product was seen to be in those parts of the world, such as Los Angeles, Sweden and Hong Kong, which were thought likely to be introducing tighter emission regulations to control air pollution. In these places, it was thought that there would be a growing demand for cleaner fuels for use in Public Service Vehicles, like buses.

"Apart from being a cleaner fuel, methanol was estimated to reduce the costs of engine maintenance (though there would be the extra initial cost of modifying the engine). To test the fuel, ICI set up trials with bus fleets and lobbied relevant politicians and regulators."

To test the fuel, ICI set up trials with bus fleets and lobbied relevant politicians and regulators.

"However, in 1993, the Avocet project was disbanded and the licenses were passed on to another part of ICI, Nobel Explosives, who have subsequently withdrawn from the business. The pressure on ICI of the early 90s recession was a strong factor in the withdrawal of the product and the abandonment of the development project."

Avocet: Not For The Want Of Trying continues: "In order to innovate successfully it is necessary for a firm to know how to manage a product development project against a background of uncertainty, in regulatory and other matters.

"However, even if a firm's motives are of the highest - to respond positively to perceived environmental problems – there is no guarantee that it will be able to develop the market. This case is an example of how difficult it can be for a company to seek to take the lead in green innovation."

The scientific publication claims in conclusion that Avocet was a prime example of an innovation which needed to create demand in order to succeed. Not only did ICI create a new product, but they had to create a market for it.

"Despite their best intention, this proved to be a difficult task for ICI due to the players involved and the nature of the industry. Avocet failed because the innovation was not sufficiently backed.

"It shows how difficult it is to disrupt 'lock-in; individual company responses - even if motivated by green credentials - are insufficient without other, more systemic changes".

COW PALACE* - registered trademark!

by DOUG COLLIE

A failed Borders business which is still being touted as a "Best Practice Representative" for 2018 by the publication Parliamentary Review despite being placed in the hands of liquidators last month owns a highly unusual trademark, Not Just Sheep & Rugby can reveal.

Avocet Infinite PLC (now known as Omega Infinite) claimed its intellectual property (IP) was worth an estimated £60 million as it outlined 'revolutionary' plans to change the face of agricultural and energy production by implementing 'disruptive technology' on its Berwickshire farms.

Among the proposed developments outlined by directors Martin Frost and Dr Bob Jennings was the establishment of so-called cow palaces in which large herds of Piedmontese cattle would be housed, their dung to provide the raw material for a greener, cleaner fuel.

The Avocet group was obviously keen to protect the cow palace concept, as papers lodged with the UK Intellectual Property Office [IPO] demonstrate.

An application to register 'Cow Palace' as a unique trademark was filed with the IPO in January 2018, and the protection for the phrase was secured in May of that year. The 'title' was transferred from Avocet Infinite, as it then was, to Avocet IP Ltd. in July 2018.

It means the company had exclusive use of Cow Palace under four separate classes of the Intellectual Property regulations.

These cover (Class 29) processed food in relation to meat and other farm products; (Class 31) animal feed and fodder; (Class 42) research and development services including environmentally friendly forms of energy and power; and (Class 44) agricultural services relating to environmental conservation.

Avocet companies also registered a number of other trademark applications with the regulators in the UK, Europe and the United States of America.

The word 'Avocet' or an illustration of the wading bird from which the company took its name features in all of the paperwork lodged with Intellectual Property authorities.

An American trademark application relates to a fuel additive named Avocet with the registration having originally been filed with the US Patent and Trademark Office in November 2014 and registered there in June 2016.

The applicant in November 2014 - a month before Avocet Infinite PLC was incorporated -  was a company called Avocet Solutions Inc., of Hockessin, Delaware, USA.

Categories covered by the successful application were: "Chemical products for use as additives for fuel; chemicals used in industry, science and agriculture; chemical additives for petroleum products; chemical addition for fuel and oils in particular to prevent smoke; chemical additives for diesel fuel for reducing emission."

The Patent Office papers record a change of ownership of the trademark in April 2017 from the American firm to Avocet Infinite, with another ownership change to Avocet IP Ltd in November 2018.

There are three recorded trademark registrations by Avocet IP Ltd. which appear in the files of the European Union Intellectual Property Office (EUIPO). These all feature the word 'Avocet' and were approved for inclusion on the European register in November 2014, August 2017 and February 2018.

*Footnote: It is not clear whether Avocet Infinite management attempted to register Cow Palace as a trademark in the USA. The brand has been the exclusive preserve of the District Agricultural Association of the State of California since 1985.

Borders population ageing fast

by EWAN LAMB

An up-to-date demographic profile of the Scottish Borders shows the average age of the region's residents is now 49.1 years, far in excess of Scotland's average of 42 years with those in the pensionable bracket representing almost a quarter of the region's population.

The latest data from National Records of Scotland covering the period to June 2019 also shows that the number of deaths in the region exceeded births by almost 2,500 yet the number of people living in the area increased due entirely to inward migration.

These figures demonstrate yet again that the local economy will face increasing issues linked to the availability of labour and services for the care of the elderly.

The decline in the working age population has been a continuous problem for many years. The latest report shows that between 2009 and 2019 the number of 0-15 year olds dropped by four per cent with a similar loss in the ranks of 16-64 year olds. Meanwhile the numbers over 65 shot up by 24%.

All of this means 16% of Borderers are under 16 (Scottish average 17%), working age population stands at 59% (Scotland 64%) with 24% of Borders citizens above the age of 65 (national average 19%). The local average age of 49.1 years (Scotland 42 years) has Borders men at 48.5 years and women at 49.5 years.

The overall population for Scottish Borders crept up from 115,270 to 115,510 last year. Ten years ago the number living locally stood at 113,590. Population density is recorded at 24 people per square kilometre for the Borders compared to Scotland's figure of 70 per sq. km.

Migration estimates suggest 2,370 individuals moved to the Borders from other parts of Scotland last year, 1,610 from the rest of the United Kingdom, and 290 from overseas giving a total of 4,260.

According to National Registers of Scotland 3,680 moved in the other direction, 2,170 to other parts of Scotland, 1,180 to the rest of the UK and 330 overseas.

Over the last ten years the total number of Borders births (10,657) compared to the number of deaths (13,011) created a natural population change of minus 2,354.

The replacement of the ageing workforce is likely to be a key issue for the new South of Scotland Enterprise agency.

A 2019 skills assessment of the South of Scotland (Scottish Borders and Dumfries & Galloway) by Skills Development Scotland (SDS) outlined the labour force requirements in the ten years to 2029.

SDS said "Whilst employment is forecast to stay the same from 2019 to 2029, the need to replace workers leaving the labour market will create 39,700 opportunities. To fill these jobs, and others, there is a forecast requirement for 36,700 people in the region from 2019 to 2029. 

"The difference between the people and job requirements is due to some people having more than one job, for example someone who has two part-time jobs."

The assessment forecasts that by occupation, the greatest number of people will be required in: Clerical and Service Elementary Occupations, 4,800 people; Sales Occupations, 4,600 people; Trades, Plant and Storage Elementary Occupations, 4,300 people; Teaching and Research Professions, 3,700 people; and Skilled Agricultural Trades, 2,600 people.

SDS warn: "The employment growth that has occurred in the South of Scotland in the past is not forecast to continue. From 2019 to 2029, employment is forecast to stay the same.

"Job losses in the South of Scotland are also forecast in some sectors, notably in production sectors and the public sector. Manufacturing is the sector forecast to have the greatest number of job losses from 2019 to 2029. During the forecast period a decline of 1,800 jobs is anticipated. This reflects the general trend of more capital intensive and higher value-added activity in the sector, which requires less labour-intensive methods.

"Employment is also forecast to fall overall in the South of Scotland’s public services sector with Public Administration and Defence forecast to contract by 600 jobs over the forecast period due to continued pressure on public finances.In the South of Scotland, 39,800 job openings are forecast from 2019 to 2029. These will arise almost completely due to the replacement requirement, which will create 39,700 openings."

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”.

From "world domination" to liquidation in next to no time

by DOUG COLLIE

The spectacular financial collapse of Borders-based "cutting edge" venture capitalist group Omega Infinite - reported exclusively in these columns earlier this week - could not be further from the claims being bandied about by the firm's directors as recently as 2017.

Company subsidiaries were said to be pushing back the boundaries of agricultural and fuel production by developing so-called 'disruptive technologies'.

But as hundreds of shareholders trusted Omega (formerly known as Avocet Infinite) with £17 million of their money the group was racking up multi-million pound losses while the directors were doubling their annual remunerations.

The annual accounts for 2018 should have been submitted to Companies House by December 24th 2019. But the deadline was not met and in fact the data had still not been posted when the Secretary of State sent in joint liquidators on April 28th.

Omega Infinite's plans to revolutionise food and fuel output have been well documented by the Parliamentary Review which handed Avocet (as the Review continued to call them) free plugs on at least six occasions, the last one at the beginning of April.

Directors Martin Frost and Dr Bob Jennings were given adequate space to promote their "world-wide natural capital company" as they described it in the last published accounts for 2017.

The strategic report for that year told shareholders: "Avocet provides technologies that work more efficiently with the planet's energy, water and food. The Avocet Group aims to have a global presence with activities in North America, Europe, the Middle East, the Far East and Africa."

It was also claimed in the document that Coller IP, an independent consultancy that values intellectual property placed a rising value of £60 million on Avocet's natural capital intellectual property.

At the time the business was decidedly small scale, based on two Berwickshire farms with a herd of Piedmontese cattle which were to be housed in 'cow palaces'.

Here's what investors read in the 2017 accounts: "Avocet Infinite is evolving into a holding company where its main activity will be a generator and owner of intellectual property which wil be marketed and sold throughout the world via a sophisticated and self-financing franchise network".

The business review for that year reported capital assets of £18.8 million (£18.3 million in 2016). The loss after tax was recorded as £5.322 million (£2 million) while the Group operating loss was £4.784 million (£1.841 million).

Principal risks to the business included these two passages: "Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with financial liabilities" and "Brexit risk - To address Brexit challenges Avocet has established an offspring company based in Cork. Avocet Bio Solutions is now a recognised EU force with Avocet becoming a foundation member of the Irish and EU Bioeconomy Campus at Lisheen, Tipperary".

Despite a 100% increase in losses directors' remuneration more than doubled from £250,000 in 2016 to £540,000 in 2017. The highest paid director received remuneration of £270,000.

Second 'revolutionary' farm business suffers financial meltdown

EXCLUSIVE by EWAN LAMB

A Borders-based agri-business with 650 shareholders which attracted national media coverage for its 'groundbreaking' plans for crop growing and green fuel production has had liquidators appointed by the UK Government.

The insolvency of Omega Infinite PLC (formerly Avocet Infinite) follows hard on the heels of the financial crash experienced by a sister company, Orrdone Farms Ltd. where administrators are investigating the company's affairs. It has been estimated Orrdone Farms has debts of some £3.8 million.

As Not Just Sheep & Rugby reported exclusively in March the joint administrators who have taken over control of Orrdone Farms plan to sell off two Berwickshire farms which were earmarked as the locations for a 'fascinating' model "using disruptive technology to change the face of modern farming".

An official notice published today (Friday) confirms that Ashleigh Fletcher and Joanne Hammond, of insolvency practitioners Begbies Traynor, based in Sheffield, were appointed joint liquidators of Omega Infinite on April 28th. The notice adds that the appointment was made by 'the Secretary of State'.

Omega Infinite has featured on a number of occasions in articles published online by Parliamentary Review.The publication reported in one extremely upbeat article how Avocet, as it then was, had grown its share capital from £50,000 to £17 million in £1 shares in the space of four years.

As we reported in March, the "new and innovative techniques" being pioneered by Omega (Avocet)'s directors Martin Frost and Bob Jennings...both are also directors of Orrdone Farms ...were highly praised as recently as 2018 by Councillor Mark Rowley, Scottish Borders Council's executive member for business and economic development. Mr Rowley told The Berwickshire News after a site visit in October of that year: "The model is fascinating, I hope it will bring significant investment and employment to the Borders."

The various companies involved in the farm businesses are registered in Berwick-on-Tweed. But their activities were centred on Sunwick and Harcarse Hill farms in Berwickshire which the Orrdone Farms administrators hope to sell. They were appointed by an agricultural lending firm owed £3.2 million.

One of Mr Frost and Mr Jennings's ambitious proposals was to house herds of Piedmontese cattle in 'cow palaces' with the animals' excrement being converted into green fuel to power vehicles.

The Orrdone Farms administrators' state in their initial report: "In our discussions both with Mr Frost and the company secretary, we were informed that Orrdone Farms Limited had ceased to trade at the end of May 2019 and that it no longer owned any trading assets (including livestock), or had any employees. Invoices later provided to us showed that all of the Company's trading assets and livestock were sold to Avocet Infinite plc (now Omega Infinite plc) on 1 June 2019." 

The document shows the joint administrators have asked the directors of Orrdone on seven separate occasions for the company's estimated financial position, but a so-called Statement of Affairs had yet to be produced .

Adds the administration report: "We have been provided with two invoices dated 1 June 2019 in the name of Avocet Agriculture Limited (now Orrdone Farms Limited) relating to the sale of all trading assets including farm equipment and livestock to a connected company, Avocet (now Omega) Infinite plc.

"We have not been provided with any evidence that these invoices have been paid, nor has the Company accounted to HM Revenue Customs for the output tax due. UK ALL [the lenders] had not been made aware of the sale of these assets which were largely covered by their debenture. In addition, we understand that some of the farm equipment and vehicles may have been subject to other finance agreements terms."