RHI claimant goes into administration

Nine in 10 mushroom growers use RHI
Nine in 10 mushroom growers use RHI

A firm which was an RHI recipient has entered administration, citing “severe cash flow problems”, although it does not appear that the cut to RHI tariffs was a key factor in its financial difficulties.

The directors of Button Farm Mushrooms Limited, which has been operating for three years from a purpose-built facility outside Markethill, called in Stephen Cave from PwC on Wednesday to act as joint administrator.

The firm had received £48,074 in RHI payments in the nine months up to February of this year.

RHI subsidy rates were retrospectively slashed from April, something which boiler owners last week told the High Court was having a severely detrimental commercial impact on many companies. The court was told that many poultry farmers and mushroom growers had biomass boilers under the scheme.

In a statement from PwC announcing the administration, there is no mention of RHI subsidies and it instead cited “difficult trading conditions in recent times, including increased raw material costs and the loss of a key customer”.

That, it said, had “resulted in poor trading performance and severe cash flow problems and the company is no longer able to continue trading in its present form”.

Mr Cave said that the business had “faced a number of adverse factors, which have impacted significantly on its ability to trade profitably”.

The case is significant because it points to one way in which the RHI overspend could fall over coming years.

A rough estimate of the Button Farm Mushrooms claim shows that it would have been in line for something in the region of half a million pounds of RHI subsidy over the next 18 years under the original tariff.

Although Mr Cave made clear that he would be exploring the possibility of selling the business and hoped that its modern premises would be attractive to a buyer, if that is not possible and the company goes under – or its facility is put to a different use – Stormont will instantly save that £500,000, even if the High Court overturns the retrospective legislation.

In court last week, boiler owners argue that point, saying that the department’s estimate that the overspend could be between £490 million and £700 million was wildly inflated.

They argued that the figure could be as low as either £60 million or £160 million, partly because of boilers which either prove irreparable, businesses which collapse or inspections which rule certain boilers out of the scheme.