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An accountancy firm has revealed how the sale of a distance-selling pharmacy (DSP) out of administration stumbled after the purchaser failed to make agreed payments, leading to the business being “novated” to a new owner in late 2025. 

In a January 12 report, PKF Francis Clark set out the history of the sale of care home DSP Remedi Solutions Limited (RSL) out of administration, a process that began in December 2024.

RSL’s sale for £350,000 to Nadeem Sarwar, the founder of digital pharmacy company Phlo, was announced in late 2024 as Mr Sarwar announced his plans to drive the care home dispenser forward as sole director under the new name of Remedi Healthcare Limited (RHL). 

However, since that agreement was announced, RHL failed to complete the paperwork needed to facilitate the ownership change “despite multiple requests” and has failed to make the agreed payments due to “cash constraints”.

A revised payment plan was agreed, with an initial instalment of £21,000 being paid in May 2025. Since then, RHL has “failed to meet the revised payment terms” according to PKF Francis Clark’s progress update.  

The report revealed RHL has paid just 10 per cent of the £210,000 agreed for purchasing stock from RSL, and that a balance of £125,285 is still outstanding for non-tangible assets such as goodwill and intellectual property rights. 

On October 7 last year, Mr Sarwar informed the administrators that RHL was “not in a position to fulfil its obligations” under the pre-package sale agreement.  

The report from PKF Francis Clark also reveals it may consider legal action against RHL “to enforce the recoverability of funds”.

The secured chargeholders named in the initial administration proceedings of RSL were Castlebridge Finance and the Midlands Engine Investment Fund. Both have received some payments and their claims now stand at £260,270 and £654,329 respectively.

The first preferential claim is held by the Redundancy Payments Service, with a lower-ranking preferential claim held by HMRC yet to be agreed with the administrators. It is “assumed” preferential creditors will realise monies from the insolvency, said PKF Francis Clark.

Non-secured creditors, who collectively are owed over £4m, are “unlikely” to see their debts repaid, they added.   

New owners plan to invest

In October, the RHL contract novated to MedPal AI, a health technology firm that had expressed an interest in the business. 

Despite the administrators’ report describing MedPal AI as the new purchaser, a spokesperson for that company has told P3pharmacy that the novation of the management contract previously held by RHL does not constitute a sale of the business.

MedPal has, however, purchased outright Universal Pharmacy, another company previously owned by Mr Sarwar that fell into financial difficulty. MedPal has reported items growth since acquiring Universal Pharmacy and declared its plans to invest in the business after paying £45,000 for it.

Administration fees higher

The administrators’ proposed fees were initially capped at £84,939, but due to the additional workload arising from complications relating to the initial deal, a revised fees estimate of £328,981 has been calculated. 

“However, to enable a distribution to the secondary preferential creditor to be made, the administrators propose to limit their total fee to £270,931,” they said. 

They have secured a one-year extension to the administration to the end of 2026 in order to facilitate the additional work necessitated by the difficulties the initial sale encountered.  

This work includes the collection of outstanding balances owed by RHL, working with MedPal to complete the novation and management agreements and dealing with the company’s pension scheme. 

Mr Sarwar has been approached for comment.