Fri, 10 Sep 2010 | ADMINISTRATION
Fellow construction group Morgan Sindall has rescued Connaught’s social housing unit out of administration, securing the jobs of 2,500 people in the process.
Morgan Sindall has snapped up the social housing repair division for its own public sector arm Lovell, in a discounted £28 million deal with KPMG, Connaught’s administrator. Lovell expects to bring in an extra £200 million per year from the acquired contracts, worth between £20 million and £40 million.
Connaught had been struggling with a falling share value, problems with securing much-needed cash and loss making contracts, before its creditors placed the parent company and social housing maintenance arm into administration on Wednesday.
It has been revealed that the firm’s accounting practices had also been put into question. Deloitte were brought into investigate.
Joint administrator Richard Heis intends to find homes for the remainder of the contracts and to secure the jobs of the 1,900 not transferred as part of the Lovell deal.
Two businesses in the group were not affected by the administration process, namely the ground maintenance arm Connaught Environmental, and the health and safety division Connaught Compliance. They continue to trade as normal.
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