News From OilFiredUp
RSS
KMPG to Sell Connaught Compliance and Environmental
8th September 2010
KPMG have issues a statement following their appointment as administrators to building services group Connaught plc, which comprises three main operating companies - Connaught Partnerships, Connaught Environmental and Connaught Compliance.
Connaught Partnerships, which provides maintenance services to social housing associations and employs around 4,400 staff at a range of locations across the UK; the company's Environmental division, which provides environmental support services (such as vegetation management and grounds maintenance) employs around 2,700 staff at a range of locations across the UK and at a smaller operation in the USA; whilst Connaught Compliance, which provides health and safety compliance advice and employs around 1,800 staff at throughout the UK.
Connaught Environmental and Connaught Compliance are not in administration and continue to trade normally. Connaught Environmental principally comprises the Fountains business acquired in 2009; whilst Connaught Compliance includes the National Britannia business acquired in 2007.
Connaught Partnerships Limited, headquartered in Leeds, is however in administration, together with a smaller company in the Partnerships business - Connaught Technical Solutions Limited.
The administrators of Connaught Partnerships Limited intend to trade the business in the short term with a view to selling and novating contracts to other providers; collecting debts and working with Connaught's customers, such as councils and housing associations, to minimise disruption to the public. The administrators are hopeful that the majority of staff will be transferred to alternative providers. However, to the extent that alternative providers do not take on employees then redundancies will need to be made. Decisions regarding redundancies will be announced as soon as possible.
The Connaught Environmental and the Connaught Compliance businesses continue to trade normally on a profitable and standalone basis with the support of their lenders. The Group has to date received numerous expressions of interest for both the Compliance and Environmental divisions. Given the level of interest in these businesses, media reports suggest that sales of both businesses will be concluded quickly.
Richard Heis, Restructuring Partner at KPMG and Joint Administrator, commented, "Following the Group's recent trading statements, a substantial review of the Group's businesses, and cash flows was carried out by the Board and its advisers. Notwithstanding the Group's bankers providing an additional £15m overdraft (announced on 29th July), it became clear that the Partnerships business was no longer sustainable and had a substantial cash requirement significantly beyond its available lending facilities. The directors therefore have placed Connaught plc and Connaught Partnerships Limited and one smaller company into administration.
"We will work closely with customers, employees, subcontractors and alternative providers to ensure services are maintained as far as possible and contracts and employees are transferred to alternative providers. Social housing tenants should continue to contact their usual helpline numbers."
"The Connaught Compliance and Connaught Environmental businesses are unaffected by the appointment and continue to trade normally under the control of their directors and with the support of their lenders. Any queries should be directed to normal contacts within those businesses."
