Deal done but redundancies made at Connaught
ADMINISTRATORS appointed to social housing group Connaught have revealed that 700 redundancies have been made despite Morgan Sindall completing a £28m deal to acquire the majority of ongoing contracts of its social housing division and transfer 2,500 staff to its business.
Connaught Partnerships, which is headquartered in Leeds provides maintenance services to social housing associations across the UK, went into administration alongside the building services group’s parent company, Connaught, which is based in Exeter, on Wednesday.
Administrators at KPMG said this morning that due to the “mobile nature” of staff at Connaught Partnerships the redundancies had been made.
KPMG said it was unable to give further details on the locations of staff affected at this stage.
Brian Green, restructuring partner at KPMG and joint administrator, said: “Immediately following appointment we conducted a commercial review of the staffing needs of the business and shortly thereafter took the decision to make around 700 staff redundant.”
Mr Green added: “As announced earlier today, the majority of contracts have been acquired by Morgan Sindall. The administrators continue to negotiate the novation of the remaining contracts to other providers and remain hopeful that further staff within Connaught Partnerships will be transferred to alternative providers.”
The deal, which has seen Morgan Sindall’s affordable housing division Lovell Partnerships, based in Tamworth, Staffordshire, acquire the contracts and their related assets from Connaught Partnerships, was completed late yesterday evening.
Morgan Sindall said the deal would allow “essential maintenance services to continue without interruption” and around 2,500 employees connected with the ongoing nationwide contracts will transfer to Lovell as part of the agreement.
Connaught Partnerships employed around 4,400 staff on appointment of the administrators.
A team from KPMG advised on the deal. Giles Taylor and Mark Firmin from the firm’s Leeds corporate finance team, and Brian Green and Dave Costley-Wood from its North West restructuring team, played a leading part on the deal.
Commenting on the deal, Richard Heis, restructuring partner at KPMG and joint administrator, said: “It has been a considerable achievement to agree such a substantial transaction in such a short amount of time after our appointment, which reflects the commitment of Morgan Sindall and the efforts of Connaught Partnerships’ management and staff to secure the deal.”
Connaught Partnerships also has hubs at Glasgow, Bromsgrove, Crawley and Exeter.
Connaught’s two other operating businesses, Connaught Compliance and Connaught Environmental, were not affected by the administration.
Connaught Technical Services, a smaller company in the Partnerships business, also went into administration earlier this week.
Coun Peter Gruen, executive board member with responsibility for housing at Leeds City Council, said he was encouraged by the news as the Council had a number of contracts with Connaught.
Coun Gruen said: “We’ve yet to see the detail of the agreement, but it seems a large number of jobs have been saved and that is to be welcomed.
“What we now need is commitment from Morgan Sindall for it to continue to employ local workers and for it to operate from existing depots used previously by Connaught.
“We have been working for several months to develop contingency plans, ever since it became clear that Connaught was having financial difficulties.”
