Concerto
Well-known member
Discovery names liquidators. I feel for all their customers caught up in this mess.
Discovery names liquidators - Marine Industry News
Discovery names liquidators - Marine Industry News
Discovery names liquidators
- Thread starter Concerto
- Start date
Bobc
Well-known member
Is it not the case that in voluntary liquidation, all supplier debts are settled and customer deposits paid are returned?
anoccasionalyachtsman
Well-known member
I don't think so. The difference between voluntary and compulsory is that the former is at the behest of the directors and the latter the creditor(s). In either case all debts could be settled, however unlikely.
benjenbav
Well-known member
You might be thinking of members’ voluntary, which is a type of solvent liquidation. In a Creditors’ voluntary liquidation the company is insolvent and - by definition - there is not enough money to settle all debts fully.
Tranona
Well-known member
I would expect that customer deposits are secure and the build contracts written such that title to the part complete boat has passed to the buyer. So buyers may not lose too much except that they might have a problem getting their boat finished. However it has been in administration for some time and I would guess the administrator has sorted out completion. The big losers will be the unsecured creditors, particularly trade suppliers.
Daydream believer
Well-known member
This whole story & related ones before it, has , allegedly ,been disorganised for some years. Unsubstantiated rumours suggest some dubious affairs . If there was any truth in them & with such a reputation, I am surprised anyone would have wanted to risk anything whatsoever with them.
steve yates
Well-known member
I doubt that customers deposits are in a separate account, especially where a business was having financial troubles. All cashflow will have been utilised just to trade a bit longer.
Concerto
Well-known member
Been looking into the background of the investor, Werner Schnaebele, who pulled out, causing the collapse of Discovery, So far nothing has shown little about him or his financial background. His German parent company, BINTI HOLDING GMBH, shows only a capital of €26,000 in late 2017. Binti Holding GmbH, Hainfeld, Germany (northdata.com)
Werne Schnaebele's company Biniti Marine Holdings Ltd, the owner of Discovery unaudited financial statement filed for the period ended 31 Dec 2020 make interesting reading.
application-pdf
There were fixed assets of £397,503.
There were Debtors listed as current assets of £2,705,546 (possibly the contract value of orders).
Creditors due within 1 year is £2,999,600.
This gives a resulting amount of total assets of only £103,449.
Nowhere is there any mention of a cash injection, despite £2m being announced in January 2021.
This is a quote from the announcement. £2m investment secured for Discovery Shipyard - Marine Industry News
The funds have been raised to use on capital expenditure as well as new project development. Werner Schaebele, who made the injection through his investment vehicle Binti Marine Holdings Ltd, became the sole owner of Discovery Shipyard in December 2019. Schaebele previously purchased the majority shareholding of the business in 2018 – since then his considerable investment in the shipyard is said to be responsible for ensuring its success and continuance.
Although the withdrawl of funding was announced in December 2021, it was only on the 6 January 2022 that director John Aylwin terminated his directorship. BINTI MARINE HOLDINGS LIMITED filing history - Find and update company information - GOV.UK (company-information.service.gov.uk)
Looking further on this document, there was a CS01 document filed on 12 Jan 2022. Confirmation statement (CS01) This form is to be used to confirm that the company details are up to date on the public register. This document was blank.
On 13 Jan 2022 (today), Werner Schnaebele resigned as a director.
Reading between the lines of all this information, it seems that there was little chance of Discovery being solvent and the directors had to place the company in liquidation.
Werne Schnaebele's company Biniti Marine Holdings Ltd, the owner of Discovery unaudited financial statement filed for the period ended 31 Dec 2020 make interesting reading.
application-pdf
There were fixed assets of £397,503.
There were Debtors listed as current assets of £2,705,546 (possibly the contract value of orders).
Creditors due within 1 year is £2,999,600.
This gives a resulting amount of total assets of only £103,449.
Nowhere is there any mention of a cash injection, despite £2m being announced in January 2021.
This is a quote from the announcement. £2m investment secured for Discovery Shipyard - Marine Industry News
The funds have been raised to use on capital expenditure as well as new project development. Werner Schaebele, who made the injection through his investment vehicle Binti Marine Holdings Ltd, became the sole owner of Discovery Shipyard in December 2019. Schaebele previously purchased the majority shareholding of the business in 2018 – since then his considerable investment in the shipyard is said to be responsible for ensuring its success and continuance.
Although the withdrawl of funding was announced in December 2021, it was only on the 6 January 2022 that director John Aylwin terminated his directorship. BINTI MARINE HOLDINGS LIMITED filing history - Find and update company information - GOV.UK (company-information.service.gov.uk)
Looking further on this document, there was a CS01 document filed on 12 Jan 2022. Confirmation statement (CS01) This form is to be used to confirm that the company details are up to date on the public register. This document was blank.
On 13 Jan 2022 (today), Werner Schnaebele resigned as a director.
Reading between the lines of all this information, it seems that there was little chance of Discovery being solvent and the directors had to place the company in liquidation.
Tranona
Well-known member
I expect they used the BMF contract where the deposit is indeed held in a separate account and released to the builder when the build starts. The title to the boat is passed progressively to the buyer to avoid the situation where the part finished boat is part of the builder's assets. This perhaps one of the reasons why undercapitalised builders struggle with cash flow as they can't use cash from one buyer to finance the previous boat, but inly to the specific boat.
I may be wrong (I have worked with type of contract building boats in the past) but doubt somebody buying a one off £1/2m+ boat would hand over money without security that he owns the boat as it is built.
AngusMcDoon
Well-known member
My new boat in build at the moment I get part ownership as the build progresses.
Sailfree
Well-known member
What about bank guarantees.
I hope for the sake of the sailors that were keen to buy these boats they protected their investment.
I remember this aspect being raised at previously bankruptcies.
A Southerly was always on my shopping list but like many a production boat suited my bank account better!! I should add that i think buying a production boat is different legal position in that firstly you put a deposit with the UK dealer that act as an agent for the builder. However your contract and your money ans any redress is legally with the agent (my understanding many UK buyers discovered this when Bavaria went bust.
Final payment is made to release boat from Factory - No Cash No Splash - was the term used when I bought our last boat.
The whole legal situation regarding buying new boats in UK is very uncertain IMHO although it must be said that the vast majority of purchases go through OK with most complaints about finishing and commissioning details.
I sincerely hope the current purchases are successful in getting their boats completed without too much hassle.
I hope for the sake of the sailors that were keen to buy these boats they protected their investment.
I remember this aspect being raised at previously bankruptcies.
A Southerly was always on my shopping list but like many a production boat suited my bank account better!! I should add that i think buying a production boat is different legal position in that firstly you put a deposit with the UK dealer that act as an agent for the builder. However your contract and your money ans any redress is legally with the agent (my understanding many UK buyers discovered this when Bavaria went bust.
Final payment is made to release boat from Factory - No Cash No Splash - was the term used when I bought our last boat.
The whole legal situation regarding buying new boats in UK is very uncertain IMHO although it must be said that the vast majority of purchases go through OK with most complaints about finishing and commissioning details.
I sincerely hope the current purchases are successful in getting their boats completed without too much hassle.
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Bathdave
Well-known member
A couple of members Of the Southerly Owners Association have posted update to members
Discovery nominates liquidators
12/01/2022
Discovery Shipyard is set to be placed into voluntary liquidation following a request by the company’s directors.
Discovery Shipyard
Discovery Shipyard sold one boat in the 12-month period following the start of the Covid-19 pandemic.
The decision has been made having regard to the boatbuilders’ financial position - – more than £4m is owed to unsecured creditors - and the directors have nominated Neil Gostelow and Stephen Absolom of Interpath Advisory as joint liquidators.
Discovery Shipyard creditors have been informed and it is anticipated the company will be placed into liquidation on 13 January.
In a notice to creditors, Interpath Advisory state they were approached by company directors on 24 November 2021 and were engaged by the sole shareholder, Binti Marine Holdings Ltd (BMHL) to undertake a contingency planning engagement for BMHL and its subsidiaries including Discovery Shipyard.
Insolvent
A draft contingency planning report was released on 13 December giving option to the company directors and to BMHL and on 15 December, the directors concluded the company could not avoid insolvent liquidation.
The notice released to creditors blames the Covid pandemic on the company’s failure with only one sale achieved in the 12-month period following the onset of the pandemic.
BMHL continued to inject funds into the business however finance and government support subsidies were not forthcoming.
New orders were forthcoming in 2021 however global supply chain issues caused delays in the availability of building materials and the company’s low credit rating constricted working capital.
Potential investors were approached to provide extra funding but while there were indications of interest, there was no commitment.
As a result of the lack of funding certainty, the directors were unable to draw down staged customer payments due in relation to boats in build and the company’s cash position deteriorated.
More than £4m is owed to unsecured creditors, including around £2.5m owed to BMHL and around £700,000 is owed to trade creditors.
Employee unsecured claims are around £300,000 while assets are expected to realise £8,000.
All employees have been made redundant while John Burnie and David Winduss have resigned from their director roles.
another member had posted this (I don’t believe there is any personal data here I need to redact)
My understanding is that a new business, Ocean Shipyard Ltd is going to operate out of two of the existing buildings in Marchwood, and it is their intention to complete boats in build, (with agreement of the owners) and build new Southerly 42's and 48's. The business is being lead by Steve Edwards the previous General Manager of Discovery together with some of the key personnel from Discovery. I was contacted by Steve yesterday as I had placed an order for a new Southerly 42 for delivery late 2022. It had not yet been started. I am told it is now an option. The new 42 is stunning and I had seen a lot of the design and engineering work done to date. It is early days but hopefully this new venture will not only complete existing orders in build but keep the great Southerly brand alive
Discovery nominates liquidators
12/01/2022
Discovery Shipyard is set to be placed into voluntary liquidation following a request by the company’s directors.
Discovery Shipyard
Discovery Shipyard sold one boat in the 12-month period following the start of the Covid-19 pandemic.
The decision has been made having regard to the boatbuilders’ financial position - – more than £4m is owed to unsecured creditors - and the directors have nominated Neil Gostelow and Stephen Absolom of Interpath Advisory as joint liquidators.
Discovery Shipyard creditors have been informed and it is anticipated the company will be placed into liquidation on 13 January.
In a notice to creditors, Interpath Advisory state they were approached by company directors on 24 November 2021 and were engaged by the sole shareholder, Binti Marine Holdings Ltd (BMHL) to undertake a contingency planning engagement for BMHL and its subsidiaries including Discovery Shipyard.
Insolvent
A draft contingency planning report was released on 13 December giving option to the company directors and to BMHL and on 15 December, the directors concluded the company could not avoid insolvent liquidation.
The notice released to creditors blames the Covid pandemic on the company’s failure with only one sale achieved in the 12-month period following the onset of the pandemic.
BMHL continued to inject funds into the business however finance and government support subsidies were not forthcoming.
New orders were forthcoming in 2021 however global supply chain issues caused delays in the availability of building materials and the company’s low credit rating constricted working capital.
Potential investors were approached to provide extra funding but while there were indications of interest, there was no commitment.
As a result of the lack of funding certainty, the directors were unable to draw down staged customer payments due in relation to boats in build and the company’s cash position deteriorated.
More than £4m is owed to unsecured creditors, including around £2.5m owed to BMHL and around £700,000 is owed to trade creditors.
Employee unsecured claims are around £300,000 while assets are expected to realise £8,000.
All employees have been made redundant while John Burnie and David Winduss have resigned from their director roles.
another member had posted this (I don’t believe there is any personal data here I need to redact)
My understanding is that a new business, Ocean Shipyard Ltd is going to operate out of two of the existing buildings in Marchwood, and it is their intention to complete boats in build, (with agreement of the owners) and build new Southerly 42's and 48's. The business is being lead by Steve Edwards the previous General Manager of Discovery together with some of the key personnel from Discovery. I was contacted by Steve yesterday as I had placed an order for a new Southerly 42 for delivery late 2022. It had not yet been started. I am told it is now an option. The new 42 is stunning and I had seen a lot of the design and engineering work done to date. It is early days but hopefully this new venture will not only complete existing orders in build but keep the great Southerly brand alive
Tranona
Well-known member
Confirms what I suggested earlier. Customers' funds are not at risk as they can only be drawn down as the boat is built. To start the build of a boat the builder needs supplies of materials etc and if it has no working capital and poor credit rating it can't procure supplies.
You can't escape the fact that developing new models aimed at a very small market requires working capital as you can no longer expect prospective buyers to finance this up front. Too many people have been burnt over the years by the various incarnations of Southerlys. The number of people who think the boats are fantastic seems to exceed the number who are prepared to actually take the plunge and buy one!
You can't escape the fact that developing new models aimed at a very small market requires working capital as you can no longer expect prospective buyers to finance this up front. Too many people have been burnt over the years by the various incarnations of Southerlys. The number of people who think the boats are fantastic seems to exceed the number who are prepared to actually take the plunge and buy one!
Bathdave
Well-known member
Hmm
ive always seen Discovery as the Bentlys of boats ..remember it’s Discovery that have gone bust
i think there are upwards of a dozen Southerlys (owned and built by Discovery) in production or on order
I find it slightly and sadly ironic that Discovery have gone bust and Southerly yachts will be built by the business that rises out of its ashes, when it’s Southerly that have a history of going bust !!!!
mind you on reflection Discovery have now gone bust twice and I think that’s the same number of times as Southerly..or is it three fir them?
Tranona
Well-known member
Exactly! Three for Southerly, two with the same owner/manager. Northshore was fine when it was building simple old fashioned boats in cheap premises, but it found the transition to high tech boats difficult, not helped by spending vast sums on expensive development of new models and production facilities (together with the ad and PR budget to attract new customers). The constant change in ownership and management limits the ability to build up the depth of knowledge and skills necessary to build such boats successfully. So every build is almost a one off.
Creating a sustainable business out of low volume high cost boats is really difficult. The original Discovery 55 hit a sweet spot and sold well for many years, but the market is limited and they never found a good follow on model - so went bust. Resurrecting the Southerly designs seems a good short cut to get a marketable range, but again none of them hit the sweet spot like the old 110/35 did.
Nothing new about this cycle of boom and bust. I have just bought a 1979 Golden Hind which was arguably the Discovery of its day (1970's). Hit that sweet spot for a good long distance cruiser. Between 1972 and 1982, over 150 were built and there was long waiting list at one time. Then it just stopped as other, better boats for the job came on the market and at a time when the £ strengthened against the $ killing the US market. Neither the smaller (26) nor the larger 39 were successful, good boats though they were.
BTW Bentley have been bust 3 times, but Southerly is more like Aston Martin which unlike Bentley has yet to find a secure owner, nor a car that will generate a sustainable profitable position in the market.
Frogmogman
Well-known member
It’s entirely possible for a builder with a full order book to go bust, if there is inadequate cash in the company, or there is the prospect of a massive charge against the company. .
Just look at Fora marine / RM. Prior to their bankruptcy a couple of years ago, they had been bought out, but the new owners had inadequate reserves.. Despite a 2 year order book, it only took an issue with a subcontractor (Ofcet) who were building the deck mouldings, going under and interrupting production to put them under.
Look at Oyster, who had a full order book with long waiting lists, and a highly admired product, who ignored a serious problem which had arisen in the structure for the keel on an 825 (again, with a subcontractor). Astonishingly, these multi million pound boats were being built without any serious supervision by Lloyds Register or similar. We know what the result was.
Similarly, the last collapse of Discovery came after a customer’s issues with a new boat were ignored by the company. It would appear that their subsequent saviour failed to come through with the promised cash, and now the money has run out.
Just look at Fora marine / RM. Prior to their bankruptcy a couple of years ago, they had been bought out, but the new owners had inadequate reserves.. Despite a 2 year order book, it only took an issue with a subcontractor (Ofcet) who were building the deck mouldings, going under and interrupting production to put them under.
Look at Oyster, who had a full order book with long waiting lists, and a highly admired product, who ignored a serious problem which had arisen in the structure for the keel on an 825 (again, with a subcontractor). Astonishingly, these multi million pound boats were being built without any serious supervision by Lloyds Register or similar. We know what the result was.
Similarly, the last collapse of Discovery came after a customer’s issues with a new boat were ignored by the company. It would appear that their subsequent saviour failed to come through with the promised cash, and now the money has run out.
girlofwight
Active member
And that owner is now knocking out MoBos with the marine press fawning over them and not mentioning the elephant in the room. Third time lucky?
girlofwight
Active member
Having bought two boats, Southerly and Hardy and seen the yards go under within a few years, I consider myself very fortunate not to end up with half a boat and a problem - I don’t think I would have the courage to buy new again, unless it was a completed stock boat.
E39mad
Well-known member
Discovery used the Southerly moulds to build a new line of Discovery Yachts with a redesigned deck, interior and fixed keels. Kept the tooling cost down enormously in comparison to starting afresh. Shame it did not work for them.
The Southerly brand has a strong following and rightly so. I hope they manage to survive in some form or other as we virtually have no yacht builders remaining in the UK bar Oyster, Rustler and Spirit Yachts.
The Southerly brand has a strong following and rightly so. I hope they manage to survive in some form or other as we virtually have no yacht builders remaining in the UK bar Oyster, Rustler and Spirit Yachts.
dgadee
Well-known member
With interest rates so low, what part does bank lending (or not) have in all this? Are banks wary of yacht builders?
My father was a farmer who would buy, improve and sell small farms. Every one he bought, he said, was sold because the bank lent money (often not needed) and then wanted it back quickly, so bankers are not always your friend.
My father was a farmer who would buy, improve and sell small farms. Every one he bought, he said, was sold because the bank lent money (often not needed) and then wanted it back quickly, so bankers are not always your friend.
