CONSTRUCTION FIRM CLUGSTON has entered administration, with some parts of the company to continue to trade as contracts are sold off.
James Clark and Howard Smith from KPMG’s Restructuring practice have been appointed joint administrators to Clugston Group Limited and Clugston Construction Limited.
In addition James Clark and Chris Pole have been appointed joint administrators to Clugston Services Limited.
Operating from over 25 sites primarily across the North and Midlands, the Scunthorpe-headquartered business has companies involved in construction, civil engineering, logistics, property development and facilities management.
The businesses have suffered as a result of losses on a number of large and complex energy from waste contracts, accentuated by the insolvency of a key subcontractor.
Despite negotiations with key stakeholders to resolve issues caused by the losses, mounting pressures on the business have caused the directors to bring in administrators.
It is unclear which parts of the company will continue to trade and what the effects on roofing sub-contractors in the supply chain will be.
Some employees retained
A total of 150 staff have been made redundant with the remaining 262 of the company’s 412 total employees are to stay on while contracts are sold, with some divisions also continuing to trade.
James Clark, Associate Partner at KPMG and joint administrator said: “The directors of the business have worked tirelessly trying to rescue the group and have pursued discussions with a key stakeholder about a potential rescue deal. Unfortunately, it has not been possible to obtain the funding required, and as a result, the directors concluded they needed to appoint administrators to protect the value of business.
“Our focus over the coming days will be to seek buyers for the contracts and divisions, and to liaise with those employees who have been made redundant, ensuring they are provided with the support and information they need to claim their statutory entitlements from the Redundancy Payments Office.”
Christmas pay at risk
Unite has around 40 members at Clugston. Regional officer John McIntyre said: “This is devastating news for Clugston workers who have been told they will not be paid before Christmas.
“Unite is seeking an urgent meeting with KPMG, who have been appointed as administrators. Their priority should be to ensure that staff are paid the money they are owed as quickly as possible by facilitating access to the correct agencies.
“Our members will be provided with Unite’s full support and a meeting is being arranged to inform them of the assistance available and what action will be taken to recoup their lost earnings and help them get back to work.”