Connaught to go into administration
Connaught, the property services group that specialises in social housing, is on the brink of going into administration, according to bankers close to the company.
An announcement is expected tomorrow, I have learned.
Connaught, which employs 10,000 people, has £220m of debt, provided by half a dozen banks and a quartet of other creditors.
The lead bank is Royal Bank of Scotland, which recently provided Connaught with a further £15m in an attempt to keep the group going.
Connaught ran into serious difficulties over the past couple of months, after it emerged that a series of contracts would be lossmaking.
The management, under a new chairman, Sir Roy Gardner, the chairmen of Compass, the catering giant, has tried to put together a rescue plan.
However its bank creditors have decided instead to put the business in administration, under UK insolvency procedures.
In spite of the severity of the economic crisis that engulfed the UK in 2008, few listed businesses have collapsed. In that sense, Connaught, a FTSE 250 company which at one stage had a market value of well over £500m, is unusual.