Opal could not support Ocon, say administrators
LOSS-MAKING Ocon Construction filed for administration after its parent, Opal Group, could not bail it out.
That’s according to administrators from the accountancy group Mazars who are now handling the affairs of the Manchester business.
Last week Ocon blamed “operational issues” on its main university contracts, but parent Opal has been struggling to refinance £886m of debt with a syndicate of 14 lenders.
In its accounts the directors warned that insufficient support from funders could result in a break-up of the business which is owned by founder Stuart Wall.
In a statement the joint administrators Tim Askham and Robert Adamson said they were called in to conduct an “urgent review” in February.
“This followed trading losses in the previous year, continuing losses on current contracts and difficulties in procuring new contracts. The review identified the funds needed for Ocon to be able to complete its contracts but these could not be obtained via its parent, Opal Group, which was unable to support the plan.
“Ocon had some 50 staff and in addition engaged numerous external contractors. Construction activity on sites ceased a week ago and redundancy consultations with all staff have been underway since.
“The administrators are now urgently engaging with clients and contractors to ensure an orderly hand over of current works so that buildings can nevertheless be completed to schedule.”
One of Ocon’s biggest projects is the £50m, 1,259-bed Crown Place project for Liverpool University. This has already been transferred to the university, along with Ocon staff.