Time costs for the joint administrators for Fairline Yachts have reached nearly £1.9 million. The amount represents more than 2,300 hours at an average rate of nearly £800 per hour.
A report published by the joint administrators, Alvarez & Marsal Europe, details the process whereby the yacht manufacturer entered administration in January 2025.
The report states that prior to entering administration, Fairline Yachts was facing significant liquidity pressures with the majority of its suppliers only prepared to trade with the company on a proforma basis.
The Northamptonshire based company first entered a net liability position in the year ending 31 December 2020, when net liabilities of £3.1 million were reported.
The company incurred an operating loss of £19.9 million in the year ended 31 December 2023.
Trading underperformance
The company was acquired by Arrowbolt Propulsion Systems in December 2024 and in light of recent trading underperformance, operations were restructured with 226 of approximately 462 employees made redundant.
A new management team was also appointed to lead the boatbuilder’s turnaround.
The administrators’ report states that to further mitigate its cost-base and to improve the underlying viability of the business, Fairline had considered proposing a Company Voluntary Arrangement (CVA) and sought advice from a third-party financial advisor.
A formal CVA proposal was not issued and the uncertainty regarding Fairline’s financial position, together with its inability to meet its financial obligations, led to DF Capital seeking to enforce its security and to appoint an administrator under its qualifying floating charge.
When the administrators were appointed, the company employed 236 people.
The report details that prior to the administration, DF Capital provided Fairline with an asset financing facility of £13 million, secured via a fixed and floating charge debenture over its assets.
Working capital
Under the asset financing facility, title to a specific boat would be assigned to DF Capital when it reached a certain production stage and funds were drawn down to cover the working capital required to complete the remaining build.
On achieving completion, the debt would be repaid and title assigned back to the company to allow the boat to be sold to its third-party dealer network, under a pre-agreed contract.
In January 2025, £9,414,972 was outstanding to DF Capital which held title to 11 boats that were in production.
Between 24 January 2025 and 7 March 2925, Fairline made a trading surplus of £4.2 million relating to funds drawn down under the administration funding agreement that have yet to be utilised for trading.
Administrators anticipate the final position will be at break-even at the end of the trading period.
The boatbuilder had around £1 million in the bank with around £10 million owed to creditors when it entered administration.
The company’s assets were acquired by Bronzewood Capital in April 2025.
