Revealed: How Caparo collapsed with £160 million debt

The Black Country-based business called in administrators in October and its collapse has seen the loss of some 500 jobs.

However the administrators, from PwC, were able to sell off some parts of the group in deals that saved more than 1,100 jobs including 527 at Caparo Tubular Solutions in Bilston and Oldbury.

But documents filed by PwC at Companies House today reveal the scale of the woes that dragged down Caparo Industries, founded in the late 1960s by Lord Paul.

His son Angad, the 45-year-old chief executive of Caparo Industries, died in a fall from his penthouse home in Central London three weeks after the collapse.

A statement of affairs filed by PwC with Companies House shows total liabilities for the group of £163.7m, including £45.6m owned to the group pension fund.

It also lists financial assets with a book value of around £50m that the administrators expect will release just £73,000.

PwC was called in with the task of trying to raise as much as possible to pay off creditors. There are also a string of loans between companies with the group.

The sale of businesses will raise money for the creditors, as will the sale of equipment and stock from businesses that shut down, such as Caparo Atlas Fastenings in Darlaston, Caparo Precision Tubes at Oldbury and Caparo Forging Europe in Dudley.

Meanwhile, a statement of administrators' proposals from PwC filed with Birmingham High Court, reveal last ditch efforts to save the firm requiring further funding but agreement could not be reached with stakeholders.

Although the steel crisis had hit the firm, the documents also show this was made worse by Caparo's use of an 'asset-based lending facility'. This meant it was borrowing money against its sales invoices before customers had paid. But lower sales reduced the amount of funding it could raise to pay its creditors.

Alex Flynn, spokesman for Unite, said: "There are some serious questions that need to be answered about how the company got in that situation, as they are a highly skilled workforce."

Black Country Chamber President Ninder Johal said:"There were rumours circulating about debt, but the good news is jobs have been saved and hopefully the company under new management can make a good contribution to local industry."

Russell Farrington, GMB spokesman, said he was 'gobsmacked' by the amount of debt Caparo were in.