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Wednesday, 23 July 2014

En Primeur Ltd: 6 figure estimated deficit turns into £1.7 million!

Château Latour: one of several First Growths 
missing from a client's reserve account with En Primeur Ltd 
Unfortunately En Primeur Ltd’s financial situation is much worse than it was initially thought. Before he had had a chance to have a close look at the books Nedim Ailyan had estimated that the deficit would be in 6 figures and probably at the low end of this range. Instead the report presented at the creditors’ meeting on 16th July 2014 at the Marriott Hotel in Bexleyheath painted a very much blacker picture.

Bankrupt En Primeur Ltd has losses of £1.7 million far higher than initially thought. The full extent of the company’s financial problems became clear once the liquidator saw the company’s books.

Nedim Ailyan of Abbott Fielding (Sidcup) was appointed liquidator at the creditors’ meeting held on 16th July 2014.

Creditors are owed over £1.8 million. Marco Correia, the company’s sole director and major shareholder, estimates En Primeur Ltd’s wine assets at £223,495. However, Edward Symmons, property and asset consultants appointed to realize their worth, value the stock at only £150,609.

Furthermore some of the company’s wine stocks are in France and will not be released until a £51,000 bill has been settled.

(Details: Stock held at London City Bond in En Primeur’s Trading Account cost £80,420. However, Edward Symmons, property and asset consultants appointed to realize their worth, value this stock at £48,500. A further 990 bottles, which were taken out of bond have a claimed retail value of approximately £45,109 – estimated are estimated by Symmons to have a value of around £11,000. Wines held in France: £97,975 but with a valuation of £57,000. The wines lying in France will only be released once outstanding monies of £51,000 have been paid. Thus the realizable net total for the company’s wine stocks appears to be £99,609.

According to Correia En Primeur Ltd’s problems started in 2011 when one of its suppliers was unable to deliver the 2008 en primeurs ordered. The company was forced to find replacements at the height of the Bordeaux boom. Cases that had been sold to customers for £1600 a case now cost up to £15,000.

Although it is true that prices of top Bordeaux as well as some of their associated wines such as Carruades de Lafite did rise sharply over this period only to fall back after 2011, I'm at loss to think of a wine that went from £1600 a case to £15,000 during this period unless it was sold far too cheaply in the first place. 

Losses mounted: between 30th September 2012 and 16th July 2014 En Primeur Ltd made a trading loss of £1.35 million.

The overall loss may continue to mount as investdrinks is aware that there are discrepancies between what customers thought should in their En Primeur Ltd reserve account at London City Bond and what is physically there now.

One customer has informed investdrinks that he now only has eight cases in his En Primeur Ltd reserve account instead of 20, which should have included some Bordeaux First Growths. At present it is not known what has happened to these wines.  Some of these missing wines had been purchased from other merchants and had been transferred from another bonded warehouse.

There are also some 2010 and 2011 en primeurs that have not been delivered. 

There is one clear lesson from this sorry tale. Store your valuable wine in your own account. Do not rely on putting it into a company's customer reserves as there is nothing to stop that company moving your wine without your knowledge. 


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