Dungiven-based KPL Contracts in administration

The firm does work for utility companies like BT, NIE and NI Water

KPL Contracts, a firm based in Dungiven, County Londonderry and employing around 200 people, has been placed into administration.

The firm does work for utility companies like BT, NIE and NI Water.

That part of the business has been performing well, but it also had large borrowings relating to property development.

A division of the firm had, at one time, planned to develop more than 2,000 houses in Ballyclare.

However, the firm's most recent set of accounts, filed just before Christmas, state that the Ballyclare lands have been sold.

Analysis

This is by now a sadly familiar tale: a solid trading business undone by boom-time property debt

KPL had built a niche business servicing big utility providers.

But it also took a fatal turn into residential property development - as much as £50m was borrowed to fund ambitious housing plans but with little return.

Servicing that debt was a drain on cash and a restructuring late in 2013 wasn't enough to prevent the business entering administration.

The accounts also state that the firm "suffered impairments" to the value of its property holdings and that it had been working closely with corporate finance advisers.

The accounts, for the period between April 2011 and September 2012, show reorganisation costs of more than £7.5m, which led to a pre-tax loss of £6.2m.

Ulster Bank registered a fresh series of mortgages on the company's properties in December.

Some of the firm's employers and subcontractors held a meeting in Dungiven on Thursday night - there had been speculation about the firm's future since the start of the week.

Stephen Cave and Matthew Hammond from PwC have been appointed joint administrators.

The company was founded in 1994 by Kevin Lynch who had been doing contracting work as a sole trader since 1983.

He grew the company to become one of the leading utility contractors in Northern Ireland working in areas from street lighting to windfarms.

The firm also got involved in property, planning a massive development in Ballyclare known as Westlands.

However, only the initial phase was developed.

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