Connaught to be placed in administration

Embattled Connaught has thrown in the trowel and called in the administrators, meaning thousands of jobs are at risk, after it failed to secure a new financial deal from its backers.

Last night, the company’s board called in partners from KPMG to begin the administration process for Connaught plc and its subsidiary Connaught Partnerships Ltd, which comprises the social housing division.

However, the group’s other main subsidiaries – Connaught Compliance, National Britannia Holdings, Fountains, and Connaught Environmental – are not being placed in administration and will continue to trade as normal.

Early yesterday, trading in the Connaught’s shares on the London Stock Exchange was suspended at the company’s request as it sought to assess its financial position. At 6.30pm, it released a statement indicating that it its financial backers were unwilling to extend the company any further credit, meaning that Connaught – which billed itself as “one of the UK’s leading integrated service providers” – was unable to continue in business as a going concern.

The company was established in 1982 and employs nearly 10,000 people with some 150 partnering agreements in operation across the country. Since it was established it has grown into one of the major national brands servicing tens of thousands of social housing tenants’ homes.

Since the end of July, Connaught’s board has been engaged in discussions with its lenders and alternative sources of funding with a view to restructuring its financing for the long term, but in a statement released last night it said that its efforts to put the company on a secure footing “failed to reach a satisfactory conclusion in the time available”.

“[F]ollowing 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 Limited, which comprises its Social Housing Division.”

Further announcements are expected in due course.