Oyster Yachts gone into administration
- Thread starter Happyboating
- Start date
SO40
Active Member
It seems a repeat of what happened when HTP bought Oyster. If I remember correctly, Oyster was heading for bankrupty then too, obviously due to the aftermath of the financial crisis. HTP was the preverbial prince on the white horse, kissing the princess to life.
Getting a private equity company in may seem like a great idea and at the time saved Oyster, but it is like inviting the devil to come and live with you. HTP Investments obviously said they were there to build nice boats and to be there for the long term, but their core business is to make return on their investments. And if there is no return, the plug is pulled.
It is however very sad new this. Sad for the staff first and foremost, but also sad for the brand.
Getting a private equity company in may seem like a great idea and at the time saved Oyster, but it is like inviting the devil to come and live with you. HTP Investments obviously said they were there to build nice boats and to be there for the long term, but their core business is to make return on their investments. And if there is no return, the plug is pulled.
It is however very sad new this. Sad for the staff first and foremost, but also sad for the brand.
eddystone
Well-Known Member
Which clearly would not apply someone smart or lucky enough to accumulate the wealth to buy an Oyster.
SO40
Active Member
Maybe also the fact that HR has a director/owner and still is very much a family business. Not the corporate entity Oyster has become going for the big money. HR sticks to their roots, like Oyster used to do in the RM days. Introducing and developing new model after new model costs a LOT of money....so you run out of cash, which seems to be the issue here.
http://www.edp24.co.uk/business/oys...hode-island-palma-boats-east-anglia-1-5383740
jonic
Well-Known Member
This is sad news indeed. I personally know some very, very good people who work at Oyster.
Exceptional people and good friends.
Let's hope someone steps in and resurrects the brand soon.
Exceptional people and good friends.
Let's hope someone steps in and resurrects the brand soon.
Bathdave
Well-Known Member
Seems as much about cash flow as profibability...
I have concerns about how much working capital is needed to develop the real top end boats, where prtototypes and demonstrators need to be built before there are orders and cash flows. A strong order book for existing models are large,y self funding through stage payments
Coming literally days after the Boot show and launch of their new boat it's a real smack in the face.
Re the polina star , I would have assumed they had some form of insurance to cover liability like this, so I wouldn't have thought this was the trigger. However if there was a definite liability crystallised and they went to their private equity backer and said we need some money and they said no., it would explain the suddenness
Given most generalist news media don't really get the difference between liquidation and administration I'm not reading too much into the reports as they are of which it is
Administration normally happens whenusually a bank or other creditor has security over assets and triggers an administration to protect their charge...
Directors are legally obligated to call in administrators or liquidators if they realise they are not able to meet their liabilities as they fall due...to not do so is criminal and personal on the directors.
I have concerns about how much working capital is needed to develop the real top end boats, where prtototypes and demonstrators need to be built before there are orders and cash flows. A strong order book for existing models are large,y self funding through stage payments
Coming literally days after the Boot show and launch of their new boat it's a real smack in the face.
Re the polina star , I would have assumed they had some form of insurance to cover liability like this, so I wouldn't have thought this was the trigger. However if there was a definite liability crystallised and they went to their private equity backer and said we need some money and they said no., it would explain the suddenness
Given most generalist news media don't really get the difference between liquidation and administration I'm not reading too much into the reports as they are of which it is
Administration normally happens whenusually a bank or other creditor has security over assets and triggers an administration to protect their charge...
Directors are legally obligated to call in administrators or liquidators if they realise they are not able to meet their liabilities as they fall due...to not do so is criminal and personal on the directors.
ip485
Well-Known Member
It would be interesting to know whether this is a members voluntary liquidation. There is a practical difference in that as with adminstration, the priority may go beyond just protecting the creditors, which should be the only priority in the case of any other form of liquidation.
In any event it would seem surprising if there isnt someone in the market for the assets (or some of the assets) as the underlying designs are sound and have value.
Close to my own heart essentially the same happened with Island Packet, but the assets were subsequently acquired and the mark is back in full production because essentially it is still a sound product and there is signifcant value in the design, the moulds and the IP rights.
In any event it would seem surprising if there isnt someone in the market for the assets (or some of the assets) as the underlying designs are sound and have value.
Close to my own heart essentially the same happened with Island Packet, but the assets were subsequently acquired and the mark is back in full production because essentially it is still a sound product and there is signifcant value in the design, the moulds and the IP rights.
SO40
Active Member
You don´t need to be an accountant nor dutch to read this. A profit of 103k GBP for a 39 milion GBP turnover is NOTHING! Not even worth mentioning so to speak. Take the 5,2 million euro loss of the previous year, plus the profit of 1,4 profit of 2014 and you are out by 3,7 milion GBP over 3 years...... No sane investment company wants to keep that alive, hence they aborted.
bedouin
Well-Known Member
But not really making a good enough return for an investor to keep it in the portfolio. Normally you would expect them to try to sell it as a going concern but perhaps they think the value of the component parts is as great as the whole, and by selling it piecemeal they can avoid potential liability from the keel issue that could easily put off a buyer.
ip485
Well-Known Member
Liquidity back when those accounts were published looks ok, and there was a very significant sum of cash in the Bank, but there is a very large contingency for the claim in respect of Polina Star, partly balanced by a claim against the sub contractor, which would be as good as the sub contractors ability or willingness to settle.
The loss in 2015 is clearly significant, although I dont think the accounts entirely tell us why (no doubt the accounts for 2015 might have more to say) other than a very large charge in other adminstrative expenses which again one would summise relate to Polina Star.
Sales appear to have held up so if anything it looks more like damage limitation arising from Polina Star, and maybe the impact of having had to reach a settlement without any prospect of the counter claim coming to fruition.
All speculation of course.
The loss in 2015 is clearly significant, although I dont think the accounts entirely tell us why (no doubt the accounts for 2015 might have more to say) other than a very large charge in other adminstrative expenses which again one would summise relate to Polina Star.
Sales appear to have held up so if anything it looks more like damage limitation arising from Polina Star, and maybe the impact of having had to reach a settlement without any prospect of the counter claim coming to fruition.
All speculation of course.
SO40
Active Member
The fact is, they ran out of money. Whatever the cause is. The info that the order books are good as well as the actual company being viable, gives perspective for the future of Oyster. But taken from the investor´s perspective..... you accept it and keep things afloat...or not. HTP did not.
lw395
Well-Known Member
All that is last year's news.
It seems to me that something pretty sudden has happened or they'd have been absent from Boot Dusseldorf, or at most very low key?
They seemed to be fundamentally profitable aside from the unfortunate 85.
SO40
Active Member
The latest: http://www.oysteryachts.com/
ip485
Well-Known Member
Possible, but not necessarily inevitable. (that they run out of money) They may well have had the money to pay their bills and the underlying financial cover, but not the willingness and / or ability to settle a substantial claim which had either crystallised or was expected to crystallise. That would all be grounds for a MV, certainly at the point at which settlement of the claim became inevitable. However ITYP, if this were the case running out of money would then have been inevitable.
The other side of the coin is also worth a consideration. Presumably the vessel was insured, but to what extent there might have been limitations on manufacturing defect would be interesting, and / or whether the insurers had paid out, but were pursuing their own claim agianst the company.
Sadly it is inevitable that a number of people may have suffered financially as a direct consequence, never mind the suppliers and staff.
One would hope that product liability insurance would protect or help protect from these situations but whether this was in place and the extent of the cover we dont know.
Maybe for those lucky enough to purchase a new yacht the completion list will need to include "have I had sight of the builders product liability policy and is it adequate?"
Clearly we might need a NHBC for yacht builders
in future.
The other side of the coin is also worth a consideration. Presumably the vessel was insured, but to what extent there might have been limitations on manufacturing defect would be interesting, and / or whether the insurers had paid out, but were pursuing their own claim agianst the company.
Sadly it is inevitable that a number of people may have suffered financially as a direct consequence, never mind the suppliers and staff.
One would hope that product liability insurance would protect or help protect from these situations but whether this was in place and the extent of the cover we dont know.
Maybe for those lucky enough to purchase a new yacht the completion list will need to include "have I had sight of the builders product liability policy and is it adequate?"
Clearly we might need a NHBC for yacht builders
in future.
pvb
Well-Known Member
The mention in the accounts of a £6.8 million claim against a subcontractor is intriguing, as Oyster owned all of their production facilities. Might the subcontractor be a yacht designer?
ip485
Well-Known Member
You do need to look beyond the headline profit. Extract the exceptional costs and the business appears sound and able to produce a heathy return. It is a different matter as to whether the investors wished / were able to stand by the company's exceptional costs which were clearly very significant and would have taken some time to recover. If you were the investor and had debentures and charges in place to cover and prioritise a significant part of your investment you may well have felt it better to recover some / the bulk / all of your investment now, and put to other purposes or start again having bought the assets from the liquidator. You can bet this would have been given careful consideration and a judgement reached.
Certainly based on past performance and probably an improving market in the current financial climate I suspect a few people would be happy to run that business on the basis of what was paid for it shed of its warranty claims and making damn sure there was good product libaility in place in the future.
JumbleDuck
Well-Known Member
The previous owners bought the company for £70m in 2008 and sold it for £15m in 2011. That doesn't sound desperately healthy. Looks more as if they have been in trouble for years. Order books are fine, but not if you are taking orders at less than cost ...
Minchsailor
Well-Known Member
I've found the accoounts for 2016. On 31st Dec 2016 they had c£5.9M in the bank (2015 it was £100K).
When HTP took over in 2014-5 'Exceptional administrative expenses' ballooned from £230K to £5.8M, but were back to £550K in year 15/16.
There is also an item on the balance sheet of 'Amounts owned to group undertakings' of £8.1M.
In a previous life I was involved in M&A activity, and if I saw these sorts of numbers on a company we were interested in, I would be smelling a rat.
In the UK Oyster Marine Ltd is owned by Oyster Marine Holdings Ltd (which is the owner of the all the other Oyster companies), which in turn is owned by HTP.
My guess (and it only a guess) is that they over reached themselves, and HTP took fright.
When HTP took over in 2014-5 'Exceptional administrative expenses' ballooned from £230K to £5.8M, but were back to £550K in year 15/16.
There is also an item on the balance sheet of 'Amounts owned to group undertakings' of £8.1M.
In a previous life I was involved in M&A activity, and if I saw these sorts of numbers on a company we were interested in, I would be smelling a rat.
In the UK Oyster Marine Ltd is owned by Oyster Marine Holdings Ltd (which is the owner of the all the other Oyster companies), which in turn is owned by HTP.
My guess (and it only a guess) is that they over reached themselves, and HTP took fright.
guardian
Well-Known Member
HTP investments websites not working/down................................mmm?
bedouin
Well-Known Member
It's a private equity firm - I'm surprised they have a web site.