Ocon Construction heads for administration

OCON Construction, the subsidiary of student property developer Opal, is heading for administration.

The Manchester business filed a notice of intention to appoint administrators at the High Court on March 1.

The notice protects the company from action by creditors. Administrators could be appointed within days.

In a statement Opal said the move was prompted by “operational issues” on Ocon’s main university contracts.

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.

In a statement Liverpool University said: “The university has established a subsidiary construction company in order to take over responsibility for the delivery of its student residential development, Crown Place. As part of the arrangement agreed by Opal Property Group and the university, staff currently employed by Ocon will transfer to the new university subsidiary.

“The university is committed to providing world-class accommodation for its students and has considerable expertise in the delivery of major construction projects. This arrangement will enhance our in house capability and secure the expertise of a team who have been working on the project since last summer. The team successfully delivered the university’s Vine Court student accommodation which opened to students in September.”

Annual accounts published in January showed Opal Group was struggling to refinance £886m of debt with a syndicate of 14 lenders.

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 the year to September Ocon recorded sales of £41.2m, down from £54.9m. It delivered 1,751 student rooms and completed projects for the universities of Liverpool and Sussex. Overall the Opal Group employs 546 staff.

Mr Wall could not be reached for comment.