Transrent collapse 'caused by low rates'

Former Transrent chief Tom Hart says the collapse of his trailer rental and financial services group was sparked by low rental rates "killing the industry" and a failure to secure new funding.

Administrators from Deloitte, appointed on January 11 for the Transrent group of companies, revealed the Stafford-based firm owed around £65m - more than double the group's annual turnover figure - to 30 finance companies and two private equity firms. All sites have been closed, Deloitte says.

Most of the company's 70 staff have been made redundant although Motor Transport has learned that a number of senior Transrent sales and operational managers moved to former rival TIP at the beginning of this week.

Before Christmas Hart was optimistic about securing an acceptable refinancing package. He now tells MT that, although Transrent's financial backers had agreed to reduce the debt by a "substantial amount", the company's attempts to secure new forms of funding ultimately failed at the beginning of this year.

Hart says the trailer rental market in 2006 was tough due to a price war on rates - an issue that he had raised several times. "Low rates are killing the industry and trailer rental firms cannot make a profit," says Hart. Ironically, he says there were signs of rates improvement at the end of 2006.

Administrator Nick Edwards also blamed Transrent's demise on cut-throat price competition and an inability to restructure financially.

"Trading conditions in the industry have been difficult for some time and the group, whilst maintaining fleet utilisation, has suffered from falling rental rates. The group has been working to restructure its finances for some time, but unfortunately was unable to secure an acceptable refinancing," he says.

The Transrent group of companies includes Transrent Holdings, Transrent Trailer Rental and United Transport Finance.