[ad_1]
EY said in a report published with Companies House last week that the contractor had estimated liabilities of £308 million to trade creditors.
Six UK subsidiaries of the construction giant, including its main ISG Construction arm, filed for administration in September, sending shock waves throughout the industry.
It emerged in October that almost 20 architects were owed a combined £870,000 by the contractor. Among them are Stride Treglown, TP Bennett, AHMM, AHR, BDP, Piercy&Company, GT3 Architects and NBBJ with others expected to come forward.
But, following EY’s stark message, it now appears any attempt to salvage funds from ISG would be fruitless.
With just £34.6 million expected to be realised, and preferential creditors such as staff and HMRC owed in excess of £95 million, EY said it was ‘highly unlikely’ there would be any cash remaining for unsecured creditors such as suppliers.
The administrator’s report said draft FY23 accounts showed turnover of £2.2 billion but a net loss after tax of £133 million.
This included ‘significant asset write-downs’ of £148 million ‘in relation to contract losses’, it added.
Administrators cited Covid, the war in Ukraine and the additional time and money required for high-rise housing schemes among the factors affecting ISG in the years leading up to its collapse.
Difficulties procuring performance bonds for certain projects ‘adversely affected’’ profitability while the cancellation of one big project and the pausing of another ‘negatively impacted cashflow’.
Market speculation in the autumn of 2023 ‘led to many suppliers and creditors narrowing their credit terms’, said the report.
An offer for the entire share capital of ISG Group from investors including South African Andre Redinger and Australian James Overton fell through and, despite last-ditch attempts to find alternative solutions, the company ultimately fell into administration.
According to construction intelligence provider Glenigan, the contractor had a project pipeline worth £4.3 billion when administrators for all eight firms were appointed on 20 September. More than half of that workload was already on site.
As a result, a number of schemes were put on hold, including Piercy&Company’s £70 million Regents Quarter offices-to-labs project at King’s Cross and its nearly completed overhaul of Millennium Bridge House next to The Thames.
Other affected projects on ISG’s books include the £32.7 million restoration and redevelopment of Birmingham’s Moseley Road Baths, overseen by Donald Insall Associates; the £44 million conversion of Coventry’s former Ikea store into an arts and culture centre by Buttress; and the £281.6 million Queen Square Institute of Neurology and UK Dementia Research Institute for the University College London, designed by Hawkins\Brown.
However, clients are already rolling out contingency plans to restart stalled schemes. In Cardiff, it has been reported, the council has brought in one of ISG’s subcontractors to finish off the part-built £106 million Fairwater Campus school project designed by HLM.
[ad_2]
Source link