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lost its shine
Page 7
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FRANCHISED PARCELS carrier Diamond Express is in the hands of receivers. following HSBC's decision to appoint insolvency practitioner Kroll.
Joint administrators at Kroll's Leeds office will now be handling the receivership of the company, which only started operating at the end of last year.
A Kroll spokesman would not reveal the company's losses, although one company,AA Speed Couriers, claims that it is owed around £6,000.
"There is next to no chance of getting any of that money back. What was so surprising was the speed of the collapse — just five months," says AA Speed Courier's manager David Ruffles.
At the end of March Armstrong Brooks, a group with commercial property and IT interests, acquired a controlling interest in Diamond Express, investing £250.000.
At the time Diamond Express was "urgently seeking finance" according to Armstrong Brooks, which was assured that the parcels company would break even by the end of June.
Then on 17 May, Armstrong Brooks discovered that losses were increasing as the traffic grew. "We made it clear to the company that we were unwilling to provide further funds for what was clearly becoming a bottomless pit," says chairman Robert Cory "We sympathise with other creditors," he adds. "But the bottom line of all this is that Diamond Express has burned through 1250,000 of our money in six weeks."
It is understood that Diamond Express franchisees were required to pay a minimum of £15,000 for exclusive rights to an area.