Glimmer of hope for creditors as MD buys Lord Rayleighs
By Philip Clarke
MD FOODS has bought the assets of recently-collapsed Lord Rayleighs Dairies, offering farmer creditors some hope of a partial dividend.
Just over 100 farmers are owed about £1m for milk deliveries from August 1-August 20, when administrators from Coopers and Lybrand were appointed.
Joint administrator Chris Barlow says it is still too early to say exactly how much is owed and what will be available to unsecured creditors once the banks have been paid. In addition to farmers, money is owed to Milk Marque, which supplied 40% of Lord Rayleighs 140m litres a year, equipment suppliers and hauliers. A quick sale was essential, said Mr Barlow. The collapse in May of Cricket St Thomas in Somerset had shown how quickly a milk field could disperse.
Commercial director of MD Foods, Nigel Freeman, said that farmers supplying Lord Rayleighs would have their existing contracts maintained for the next few months, but would eventually move on to MD payment terms. He also confirmed that MD was taking no responsibility for liabilities incurred before August 20.
The purchase includes the modern dairy at Hatfield Peverel near Chelmsford, five depots in the south-east and 388 staff. MD is already the countrys third biggest supplier of drinking milk, processing 600m litres a year at dairies in Newcastle, Preston, Leeds, Settle and Oakthorpe, north London. The Lord Rayleighs brand will be phased out as soon as possible, said Mr Freeman.
Affected farmers have welcomed the purchase. "It allays our fears that our milk might not have been picked up," said Trevor Meen, chair-man of the newly-formed Norfolk and Waveney Valley Group of about 50 producers who formerly supplied Lord Rayleighs. But there is still no date for a creditors meeting. *