The Pre-Packaged Sale of Huboo Technologies – What Happened?
Introduction
On 23 December 2024, Huboo Technologies entered administration following years of financial losses and a liquidity crisis. The once-promising eCommerce fulfilment company had raised over £118 million in investment and expanded across Europe, yet it failed to achieve profitability.
With no viable buyers willing to acquire the organisation(s) as a going concern, Huboo’s assets were sold for just £9 in a pre-packaged administration deal to Brislington Tradeco Limited, an entity backed by Baaj Capital Limited. This controversial sale allowed the organisation(s) to continue operations under new ownership, but it left secured and unsecured creditors facing substantial losses.
This article explains how the administration process unfolded, why a pre-packaged sale was chosen, and what the implications are for creditors, employees, and the industry.
What is a Pre-Packaged Administration?
A pre-packaged administration (pre-pack sale) is a process where a company arranges the sale of its organisation(s) and assets before formally entering administration. This type of sale is executed immediately after administrators are appointed, ensuring minimal disruption to operations.
Why are Pre-Packaged Sales Used?
Pre-packaged administration is often used to:
- Preserve organisation(s) continuity by allowing trading to continue under new ownership.
- Maximize returns for creditors compared to liquidation.
- Protect employees’ jobs through a structured organisation(s) transfer.
- Secure a rapid resolution rather than prolonged insolvency proceedings.
However, pre-pack sales can be controversial, especially when the new buyer is connected to previous investors or management.
The Huboo Administration Timeline
1. Financial Crisis and Failed Rescue Attempts
By October 2024, Huboo identified a £6 million shortfall, which was necessary to continue trading. The company sought investment from existing shareholders, but by 12 December 2024, the lead investor withdrew support, forcing the company to seek an urgent buyer.
2. Accelerated Sale Process
Interpath Ltd, the appointed administrators, launched a rapid sales process on 12 December 2024, targeting:
- 34 potential buyers, including trade buyers and financial investors.
- Financial institutions interested in restructuring the organisation(s).
- Existing shareholders who might offer a management buyout.
Despite these efforts, no viable solvent offers were received, leaving only one interested party with an insolvent offer.
3. The Pre-Packaged Sale to Brislington Tradeco Limited
On 18 December 2024, Brislington Tradeco Limited, backed by Baaj Capital Limited, submitted a nominal offer of £9 to acquire:
- Goodwill and intellectual property
- Customer contracts
- IT infrastructure and fulfilment software
- Stock and operational assets
4. Completion of the Sale
On 23 December 2024, Huboo Technologies officially entered administration, and the sale was completed immediately.
crucial Aspects of the Sale:
- Nominal price of £9 was agreed to facilitate a organisation(s) transfer.
- Book debts, cash at bank, and prepayments were excluded.
- 643 employees were transferred under TUPE regulations to protect jobs.
- The new owner obtained warehouse leases for nine months under an excluded lease arrangement.
While the transaction allowed Huboo’s fulfilment operations to continue, creditors were left with significant unpaid debts.
Who Were the Biggest Losers?
1. Secured Creditors
Several financial institutions had provided secured loans to Huboo, expecting repayment from asset recoveries.
| Creditor | Amount Owed (£) | Recovery Prospects |
|---|---|---|
| Kreos Capital VI (UK) Limited | £22.6 million | No expected recovery |
| MIC Capital Partners | £3 million | No expected recovery |
| Bibby Financial Services | £1.8 million | Full recovery from book debts |
| HMRC (Tax Liabilities) | £2.1 million | Partial recovery expected |
Only Bibby Financial Services is expected to fully recover its debt from customer payments and debtor collections. Kreos Capital and MIC Capital Partners are likely to receive nothing.
2. Unsecured Creditors
Huboo owed millions to suppliers, landlords, and contractors. However, no dividend is expected for unsecured creditors, meaning they will receive nothing from the administration.
3. HMRC
HMRC was owed approximately £2.1 million in unpaid taxes. The administrators estimate that a partial dividend will be paid, but it is highly unlikely that HMRC will recover the full amount.
4. Employees
While the majority of employees transferred to the new company, some did not receive their December wages before the administration. There are in addition outstanding pension contributions, which remain uncertain.
Why Was a Pre-Packaged Sale the Only Option?
Huboo and its administrators considered multiple alternatives, but none were viable:
1. Trading in Administration
- Would require significant funding to cover wages, rent, and supplier payments.
- No investors were willing to provide emergency financing.
- Risk of crucial customers pulling contracts, leading to organisation(s) collapse.
2. Company Voluntary Arrangement (CVA)
- A CVA could have allowed Huboo to restructure its debts, but required shareholder backing.
- The lead investor withdrew support on 12 December 2024, making the CVA impossible.
3. Liquidation
- Would have resulted in asset sales at lower value.
- All employees would have lost their jobs immediately.
- Creditors would receive even less than under a pre-pack sale.
4. Selling the organisation(s) to a Solvent Buyer
- The administrators contacted 34 potential buyers, but no solvent offers were made.
- The only interested buyer offered to acquire the organisation(s) as part of an insolvent sale.
Given these circumstances, the pre-packaged administration sale provided the best possible outcome.
The Aftermath: What Happens Next?
1. Administration Process
The administrators will now:
- Recover outstanding book debts to repay Bibby Financial Services.
- Distribute remaining funds (if any) to secured creditors.
- Investigate Huboo’s financial transactions for any possible legal claims.
- File for company dissolution, marking the end of Huboo Technologies Limited.
2. Impact on the Industry
Huboo’s failure raises crucial questions about the sustainability of venture-backed logistics startups:
- Can third-party fulfilment organisation(s) remain profitable in a competitive industry?
- Should startups prioritize profitability over rapid expansion?
- Will investors be more cautious about funding logistics startups in the future?
Conclusion
The pre-packaged administration sale of Huboo Technologies for just £9 highlights the dangers of scaling too rapid without sustainable profitability. While the organisation(s) continues under new ownership, creditors, suppliers, and investors have suffered significant losses.
This case study serves as a cautionary tale for startups relying on external funding instead of generating profits. The next article in this series will explore how different creditors were affected, and whether any legal actions might follow.
For ongoing improvement, focus on warehouse operations, parcel delivery, inventory management, and third‑party logistics to achieve consistent results.
