Connaught Called in KPMG As Administrators
Connaught has asked KPMG as administrator as it fears that imminent collapse of the company could deprive 10,000 persons from the job.
This failed social housing group is facing volleys of questions over their financial disclosures. The company had breached its banking agreements and it disastrously failed to raise alternative fund to run the company.
Connaught gave a statement to the stock exchange that he had extensive discussions with some of the secured lenders and it was concluded that desired monetary support might not be available.
He added that consequently the board has taken a decision to appoint their partners from KPMG as administrators of Connaught plc. and its subsidiary, Connaught Partnerships Limited. KPMG was originally an advisor to a proposed restructuring of £220m debt on Connaught.
The problem began to sprout up after the emergency Budget of June, 2010 when Connaught suddenly announced that their business would take a dip as some councils postponed projects to promote their stock connected with social housing ahead of spending cuts enforced by the government.
It was Royal Bank of Scotland which had initially provided loans to Connaught so that the latter could buy time to restructure. However, the quantum of financial problems engulfing Connaught was found to be too large and RBS felt it to be safe to stop providing fund for the entire group to bring it on the track again.
The Guardians has reported that plans are in place to put the social housing group into the hands of an administrator. Simultaneously environmental/forestry and the compliance division would be reinforced. These Connaught’ divisions provide safety, health and environment management advisory services. Remaining social housing contracts would be off loaded to other suppliers in quick time and this group will be winded down at the earliest.