Solar farm company owing £655m to council enters administration

Thurrock Council leader, Cllr Mark Coxshall, has voiced his support for solar energy company Toucan Energy Holdings (TEH1), which reportedly owes the financially beleaguered local authority more than £650m, entering administration.

Cllr Coxshall said he hopes to bring "certainty" to the council's finances as soon as possible.

Thurrock’s financial troubles gained attention earlier this year after an investigation by the Bureau of Investigative Journalism (BIJ).

Public interest litigation organsisation Good Law Project in August threatened a judicial review of the local authority's decision to invest £138m in a solar energy business, via an investment fund named Rockfire Capital.

Rockfire Capital – currently in liquidation – was owned by businessman Liam Kavanagh, who also directly owned TEH1 at one point in time.

In September the Government decided to intervene at Thurrock, citing serious financial and commercial risks and the "seriousness" of allegations made about its financial decisions.

Essex County Council was subsequently appointed as Commissioner and Best Value Inspector, meaning it is exercising Thurrock's strategic financial functions.

Commenting on his decision to agree to support TEH1 entering into administration, Cllr Coxshall said: "This is a positive move forward in enabling Thurrock Council to resolve its financial position and maximise recovery for Thurrock residents.

"The solar farms held by Toucan continue to generate income and as the primary creditor Thurrock Council will be able to seek to recover the value of investment.”

He said he would be able to share more detail regarding the impact of the news on the council's finances next month.

“As I have said before I am determined to be open and transparent regarding the council's finances and I am seeking to bring certainty to them as soon as possible”, he continued.

“I am confident that the decision to place Toucan into administration is a significant step to reducing our overall debt."

A spokesperson for the Thurrock Commissioners said: "We have been working with Thurrock to help them resolve their serious and complex financial challenges and help the council take the best course of action in relation to these very complex investments, while meeting the directions set out by the Secretary of State. The Commissioners believe Toucan entering administration is a positive step towards reducing Thurrock's overall level of debt."

In a statement Mr Kavanagh said: “I cannot comment on the decision to put the company into administration having had no role in that decision or indeed the management of the Toucan business. I installed a new management team in June 2022 and, as far as I am aware, the underlying business has traded strongly and all interest has been paid in full and on time in accordance with the terms agreed between Thurrock Council and the company. Although I cannot speculate as to the reasons for the company going into administration, if I am approached, I will assist the administrator to achieve the best outcome for the company's stakeholders. I am confident that this is a business with a positive future, particularly given the recent and current growth in the green energy market.”

TEH1, via a number of Special Purpose Vehicle subsidiaries (SPVs), owns a portfolio of 53 solar parks with a combined capacity of 513MW, located across England, Wales and Northern Ireland.

Jim Tucker, managing director at Interpath Advisory and joint administrator alongside David Pike and Kristina Kicks, said: “This is a significant portfolio of high-quality renewable generation assets which, as the UK accelerates its transition towards a green and renewable future, have an important role to play in the nation’s energy security strategy.

“The underlying solar park operations are not in administration and continue to operate as normal. Our immediate priority is to put in place the stable platform at the top of the group which will reassure stakeholders that it is business-as-usual in the underlying operations.

“Given their significant underlying cash generation, we expect considerable interest in the assets. In the coming months we will work closely with our M&A advisors, as well as Thurrock Council as the Company’s major creditor, to bring these assets to market in a full, unhurried, sales process.

“Our proposals to creditors will be published within eight weeks of our appointment, at which time we will provide more details about our strategy for the administration.”

Adam Carey