The collapse of CIMC’s UK operations
Insolvency, Advisory & Restructuring
OVERVIEW
CIMC’s three UK subsidiaries — CIMC MBS Limited, CIMC Developments Ltd (previously trading as Verbus Limited), and Verbus Systems Ltd — were modular construction specialists supplying ready-built room solutions for major hotel and student accommodation projects. Their client portfolio included Hilton, Marriott, and InterContinental, with completed developments across England. All three companies shared the same principal trading address at Colonial Buildings, 4th Floor, 59–61 Hatton Garden, London, and operated under the ultimate ownership of CIMC MBS Hong Kong Ltd, headquartered in Jiangmen, Guangdong, China.
The UK group had its origins in the Verbus group, which specialised in modular product solutions for construction. CIMC acquired the business in 2011, integrating it into its wider building and construction division. Despite new orders being secured and construction projects under way, the companies became increasingly reliant on financial support from the parent group, which had advanced loans to fund day-to-day operations. Investigations carried out by the liquidator identified latent defects in a number of completed projects, with remediation claims estimated at approximately £2 million — a liability that had been building prior to the insolvency.
The onset of the Covid-19 pandemic in early 2020 proved decisive. The lockdown resulted in the cancellation of contracts and tenders the companies had anticipated winning, removing the revenue pipeline on which their viability depended. Simultaneously, the parent company — itself adversely affected by the pandemic — withdrew financial support and was unable to provide the funding required to meet ongoing trading costs and the mounting defect claims. By March 2020, securing the necessary funding had become untenable, and all three companies were placed into Creditors’ Voluntary Liquidation on 4 June 2020, with Nimish Patel of Re10 Restructuring and Advisory Limited appointed as liquidator across all three estates.
KEY ACHIEVEMENTS
£1.1m settlement secured from GCBC
Negotiated a commercial settlement with Guandong CIMC Building Construction Co Ltd — a Chinese-incorporated entity — avoiding costly and uncertain litigation through foreign courts. The settlement was paid in full across three instalments.
Creditor dividend maximised through standstill agreement
Secured agreement from the major creditor Verbus International Limited to stand aside from the GCBC distribution, significantly increasing the dividend available to all remaining unsecured creditors.
Three distributions made across all qualifying creditors
CIMC MBS creditors received three dividend payments totalling approximately £1.05m. CIMC Developments creditors received two distributions totalling £69,180. Verbus Systems held insufficient assets for any distribution.
Tax losses monetised and VAT recovered
£1.2m in tax losses were sold for £48,000. A total VAT refund of £32,437 was recovered from HMRC, contributing to the overall dividend pool.
All three estates fully wound up
Administration concluded across all three companies by mid-2024, with statutory returns submitted to HMRC, all bank accounts reconciled, and final accounts filed with Companies House.
| Company | Return | Distributions |
|---|---|---|
| CIMC MBS Limited | 22.005p in the £ | 3 dividends paid |
| CIMC Developments Ltd | 0.57p in the £ | 2 dividends paid |
| Verbus Systems Ltd | Nil | Insufficient assets |