Construction and maintenance firm Connaught has called in administrators KPMG for its social housing business.
However, the group's compliance and environmental divisions, which comprise Connaught Compliance, National Britannia, Fountains, and Connaught Environmental, will continue to trade as normal.
The social housing business, Connaught Partnerships, employs half of the group's 10,000 employees.
These jobs, along with many of Connaught's public sector housing contracts, are now thought to be at risk.
Yesterday, shares in the company were suspended, and the board of directors has since issued the following statement:
“Since the end of July, Connaught has held discussions with its lenders and alternative providers of finance with the objective of securing additional funding and a restructuring of the Company's financing for the longer term.
“These initiatives failed to reach a satisfactory conclusion in the time available and, following extensive discussions with the Group's secured lenders, it is now clear that sufficient support would not be extended to the Group as a whole to enable it to continue trading as a going concern.
“As a consequence, the Board is saddened to announce that it is in the process of appointing partners from KPMG as administrators of Connaught plc and its subsidiary, Connaught Partnerships, which comprises its Social Housing Division.
“The Group's other main subsidiaries, Connaught Compliance Limited, National Britannia Holdings Limited, Fountains Limited and Connaught Environmental Limited (and their respective subsidiaries), which comprise the Group's Compliance and Environmental divisions, are not being placed into administration and will continue to trade normally.
“An agreement with its funders is in the course of being negotiated and an announcement will be made shortly tomorrow regarding this.”
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