SOS Wholesale owed creditors £10m upon collapse

SOS Wholesale collapsed owing creditors £10.5m, newly filed documents have revealed.

A report by administrators at recovery firm Interpath showed unsecured creditors, including more than 200 trade suppliers, were owed £6.4m at the time of the collapse, with household brands Kellanova and Mondelez the most affected.

There is not expected to be any money available to pay back what is owed, according to the report.

Lender Novuna, which funded the acquisition of SOS from its founders by investment firm RDCP in 2021, is also likely to miss out on a full repayment of the £2.2m owed by the business.

Mark and Steven Beckett, who founded Derby-based SOS in 1996 with their father Norman, are still owed £1.8m from the sale of the business to RDCP, an investment firm co-founded and owned by Sameer Rizvi and Iryna Dubylovska.

The majority of the total owed to the Becketts is made up of earnouts linked to the performance of SOS in the wake of the deal.

The pair are ranked behind Novuna in terms of repayment priority, with Interpath expecting a shortfall on the money owed.

SOS, which supplied consumer goods to convenience, discount, independent, major multiple and garden centre retailers in the UK and Ireland – went into administration and ceased trading on 8 September, when Interpath advisors Rick Harrison and Howard Smith were appointed as joint administrators.

What went wrong?

In the latest accounts filed at Companies House, for the year to 31 October 2024, SOS revenues dropped to £42.7m, down from £49.5m in 2023. While the business remained profitable, gross margins had softened over time and pre-tax profits slipped by more than half a million pounds in FY24 to £1m.

Interpath was engaged by SOS in July this year to conduct a review of the company’s short-term cashflow forecast.

Liquidity pressures on the business intensified in FY25, with cash reducing from £1.9m at the end of October 2024 to a little more than £500k by May this year.

RDCP was also pursuing a refinancing of its existing lending facilities with Novuna.

However, when Interpath delivered the cashflow forecast in August, the SOS owners became the subject of a “worldwide freezing order” – an injunction to restrain individuals or businesses from disposing of or dealing with assets on a worldwide basis.

This meant the refinancing process was unable to complete, with Interpath then retained to manage liquidity on a weekly basis.

“During this period, the company’s creditors became significantly stretched, and it was unable to meet its obligations, including amounts owed to the [Becketts] by way of deferred and earn-out consideration,” the Interpath report added.

“As a result of the freezing order, the company’s owners were unable to provide further funding. In the absense of such funding, the directors concluded the company could not continue as a going concern.”

In the week leading up to the appointment of administrators, the three SOS statutory directors, Rizvi and Dubylovska, as well as the then MD Vipin Patara, formally resigned as directors. According to the report, the departure of key personnel prior to the appointment of administrators, combined with “the lack of available funding”, meant “it was not feasible to achieve a rescue of the company”. However, as the report highlighted, Rizvi and Dubylovska still remain listed as directors at Companies House.

The majority of SOS Wholesale’s 100 employees were made redundant as the business entered administration. More than 30 members of staff are now seeking a payout after solicitors have taken up their legal challenge, as reported by The Grocer last month.

Pearson Solicitors & Financial Advisers said it was working with “concerned employees” to review the redundancy process and assess whether the legal requirements for consultation were met.

The aftermath 

After SOS Wholesale collapsed, Patara moved to The Soft Drinks Company (TSDC), a Sheffield-based wholesale distributor of soft drinks, crisps and confectionery  acquired by RDCP in September 2023. And promises were made to offer new jobs to every member of the SOS sales and telesales teams. But earlier this month, as revealed by The Grocer, TSDC backtracked.

Staff were told they would not be offered jobs after all, due to “circumstances outside of our control”, citing “damaging press coverage and hostile social media activity”.

It follows comments by Mark Beckett on LinkedIn, who claimed the resignation of the entire management team “effectively prevented any chance of selling the business and maximising value through administration”. 

TSDC is one of 10 companies currently owned by RDCP. But the investment firm has a chequered history.

An Ipswich printing company called Ancient House Press, owned by RDCP, collapsed into administration in 2024. Companies House activity also displayed late filings regarding RDCP directorship changes, and a number of company name changes, Printweek reported at the time. In the same year, finance firm Theodore Management ordered winding-up petitions against three other RDCP companies: DCS Wholesale Group Holdings Ltd, SDD Engineering Holdings Ltd, and IAHP Group Holdings Ltd.

RDCP has been contacted by The Grocer for comment.

What’s next for SOS?

In a new LinkedIn post  earlier this month, Mark Beckett announced Acton-based fmcg wholesaler Dairyfresh had acquired the SOS Wholesale IP rights in what he described as “the revival of SOS Wholesale”.

Dairyfresh has also rehired seven former SOS sales and warehouse staff, with “more to follow”, according to Beckett.

He added Dairyfresh had started to re-establish the wholesaler’s Barnsley sales office and was reconnecting with former customers and suppliers.