The administration of Teesside-based SBV Fabrication and Site Services Ltd was caused by a cash flow problems arising from a major contract dispute with Tata Steel.
An estimated £4.08m is owed to unsecured creditors following the company’s administration just before Christmas 2014.
Administrators Howard Smith and Jonny Martson of KPMG believe around £917,880 will be available for unsecured creditors following an online auction of plant, machinery and vehicles.
The freehold of SBV’s Middlesbrough base on Dormor Way will also be marketed.
Details within a report on the administrators’ proposals show SBV had been profitable until a dispute over variations on a fixed price contract with Tata Steel prompted cashflow issues.
The firm was then faced with a winding up petition from plant hire specialists Hewden Stuart Limited.
It forced a pre-pack sale of the business to a new company formed by the management, trading as SBV Engineering, for £100,000.
According to the administrators’ report, the new owners — directors Samantha Condren and David Geary — transferred 143 of the 185 staff at the firm, while 42 were made redundant.
SBV had been financed by GE and NatWest, who were owed £1.5m and £394,000 respectively. Administrators expect both companies to recover their lending in full.