A LOCAL MP is now looking into the circumstances surrounding the collapse of boat building firm Mustang Marine in Pembroke Dock, the Herald can reveal.  

Simon Hart MP has this week met with both Stephen Hammond, Parliamentary Under-Secretary of State for Transport, and David Jones, Secretary of State of Wales, to express his concern that local firms, who are owed hundreds of thousands of pounds, will not get a penny after the firm went into administration. He has also contacted Alec Don, Chief Executive of Milford Haven Port Authority, seeking clarification regarding a number of points which he feels are a cause for concern. MHPA has confirmed they have replied to the MP. Mr Hart told The Herald: “Milford Haven Port Authority (MHPA) is being disingenuous about the Mustang affair. As a Trust Port, it has both a moral and legal responsibility to the community, including the creditors.” He added: “I understand that Alec Don and Andrew Jones were the directors who signed off Mustang Marine’s accounts for 2012, which correctly stated under accounting guidelines that the company was a subsidiary of MHPA. “It is for this reason that I find Alec Don’s comments that he cannot account for the different terminology used by the respective auditors of the Port Authority and Mustang Marine confusing. “As a Trust Port accounts should be accurate, informative and in particular transparent. “Suppliers and sub-contractors have stated that they took comfort from the fact that they were dealing with a Trust Port’s subsidiary.” Local firms are owed around £600,000. Simon Hart told The Herald: “The reality is that in some 22 months after the Port’s involvement and management control of Mustang Marine, the Authority has suffered a loss of £2.7m and other parties have lost up to a further £2m. Many people have lost their livelihood and local companies have suffered substantial losses from which it may take years to recover.” In a further development, documents submitted by Mustang’s administrators, Grant Thornton UK LLP, have revealed that losses at the company were due to the failure to achieve assumed margins on new build projects – as well as other disruption and delays. They also revealed that an unprecedented expenditure of £375,000 on refurbishing the firm’s Pembroke Dock offices – which were leased from MHPA – had placed huge pressure on the company’s cash flow. A lack of robust business procedures in quoting for contracts; sub-standard project and performance management and inadequate reporting were all ultimately causes of the firm’s demise, according to documents now lodged with Companies House. Last week, The Herald revealed that MHPA were unwilling to pay the debts owed by Mustang. Alec Don said that the port had “a responsibility but not a legal liability to the creditors.” But Simon Hart told The Herald: “In its accounts, the Port Authority described Mustang Marine as a subsidiary company – credit searches made by businesses supplying Mustang also confirmed this – but once the company entered into administration the Port decided to distance itself from the firm. “It is questionable that when the rain started coming in, they took a step back”, he added. The Herald can reveal that what money is left is quickly dwindling – Grant Thornton is being paid on average £253 per hour to administer the firm and have so far billed hundreds of hours. There are also questions being asked this week about £103,000 which was paid by the struggling firm to directors by way of fees before it collapsed – this is a similar figure to the £104,290 currently owed to Mustang employees. Last week The Herald confirmed that HSBC Bank Plc and Mustang Director Huw Thomas Lewis, who are owed £274,000 and £296,000 respectively, are likely to be paid out as their loans to the company are secured by way of a debenture. Unsecured creditors are owed £3,143,725.

 The Herald put questions to Alec Don, chief executive, Milford Haven Port Authority  

THE PEMBROKESHIRE HERALD met with Alec Don, MHPA Chief Executive, at his office yesterday (Thursday).  

The Herald put it to Alec Don that as a Trust Port, the Authority had a responsibility to all stakeholders: including port users, employees and the local community over Mustang, and the trail of debt left behind. He replied: “We do not feel there is a moral or legal responsibility but at the same time, as a Trust Port, we want to be on standby to do what we can to help. We have done masses to assist including giving extra time to pay rent.” “We will be putting money into a community interest company which will be operated by Haven Marine Services Limited. The aim of the CIC will be to help the creditors of Mustang get back some of the money they are owed.” Asked if the Mustang project was too much of a gamble for the Port, Alec Don said: “Mustang was a joint venture with MHPA. We wanted it to succeed. We wanted to support them as a business that was trading around the port.” He added: “The reason for the failure of the company in my view was due to the company trying to build two boats – both the first of their class – at the same time. Those projects went wrong. In fact, the whole Mustang project was a hell of a challenge.” Alec Don said: “It is easy to make comments after the event with the help of hindsight. What was clear is that the customers of Mustang felt that the products it was delivering were of the highest quality.”

THE NEW MUSTANG  

Alec Don said: “The new Mustang company – Mustang Marine Ltd – will now have to prove themselves in the market. But, they are led by a strong management team. Kevin Lewis (A former director of Mustang Marine (Wales) Ltd) is working with the new company, and he is the person who brings most knowledge from the old business to the new business. There are new people and new capital. There are new investors to bring strength. The new chairman of Mustang is Mark Meade, who has strong commercial skills.” He added: “We cannot pay Mustangs debts because we have a responsibility to the rest of the business. We have volatile earning streams. Earnings are going up and down. We need to maintain a strong balance sheet. We cannot honour the aspirations of the Port if we act as charity.” “We want to do what we can to support businesses in the port, but we have to remember that we are building the haven’s future, where the future is unpredictable.” Andy Jones from MHPA, also at the meeting said: “We are here to ensure the stewardship of the port for future generations, and this is something that we have to do diligently.” Mr. Don did not wish to comment about reports that MHPA had sent a report to the Department of Transport following the collapse of Mustang. But he did say: “The DoT, as an important stakeholder, would be interested on the impact the collapse of Mustang might have in the Port.” He also said that the reasons why £103,000 was paid to directors of Mustang as it was losing money was now a question for the administrators. Alec Don concluded the meeting by saying: “I bitterly regret that Mustang went down. We lost £2.7m. We are pleased though, that new businesses have emerged safeguarding 40 jobs in and around the haven.” He also said that a reference in the MHPA annual report to Mustang as ‘subsidiary’ was actually a mistake, and it was not meant in the “true legal sense”.