Building firm collapsed into administration with debts of £28m

Construction

A Bolton building firm which collapsed last month had debts of £28m – according to the administrators.

According to the administrators’ report Forrest collapsed leaving trade contractors and suppliers out of pocket to the tune of £28m.

Administrators FRP Advisory said that even the firm’s banks and lenders, which have secured credit status, could lose much of the £17.6m they are owed.

French energy firm giant Engie agreed to pay £1.3m for Forrest’s profitable housing maintenance and energy operations, which were sold on the day the company collapsed on 7 December 2018.

The deal safeguarded around 59 jobs.

The administrators said they were called in last October by directors to review the viability of the Bolton-based firm’s operations after it became apparent that an earlier financial restructuring in March 2017 had failed to raise the credit needed to fund the business.

Shareholders stumped up £5.5m and raised £4m in credit during the exercise, which saw the management team leave the business.

Despite the review Forrest failed to overcome its financial stresses as further losses and defects emerged on jobs, leaving an extra funding shortfall of £6m.

Delays and operational issues on three construction sites which were started before the refinance, combined with incorrect pre-construction estimates across new construction projects, resulted in unsustainable cash-flows and the need to appoint administrators.

The FRP report also reveals that M&E contractor Proline, which itself went into administration because of non-payment of bills, was owed over £1m.

Anthony Collier and Ben Woolrych of FRP Advisory LLP were appointed joint administrators.

On November 22, TheBusinessDesk.com reported that Forrest was bidding to secure its future after it stopped work on several developments in Merseyside and Greater Manchester.

Forrest said it was undertaking a financial restructuring, blaming “a series of incorrect pre-construction estimates” on some of its projects.

Among the high-profile projects it worked on were three schemes in Liverpool, a care home in Knowsley, and a residential development in Salford.

Click here to sign up to receive our new South West business news...
Close