ISG have ceased to trade with immediate effect
The contractors collapse has put more than 2,000 jobs on the line and hit the brakes on dozens of government construction projects.
ISG is one of the UK’s largest contractors and has completed thousands of projects since it was launched in 1989. However, it’s foundations have sadly come crashing down and the front page of the organisations website now reads: ‘ISG’s UK operations have ceased to trade with immediate effect. No further work will be undertaken on existing UK contracts, including for Construction, Fit Out and Engineering services.’
The news was confirmed by administrators EY-Parthenon on Friday, and it was revealed that most of the 2,400 people the company employed in the UK would be made redundant with immediate effect. What’s more, ISG is currently involved in 69 live government projects – including plans to increase the capacity in British prisons by an additional 20,000 spaces and several school building schemes.
Against this backdrop, research from Barbour ABI estimated the government projects ISG is involved in are worth £1.8bn – these include 22 live schemes with the Ministry of Justice.
In the months leading up to this unfortunate downfall, EY-Parthenon explained ISG experienced liquidity constraints. Directors explored a number of solutions to try and save the business, including looking for a potential buyer but they failed to complete a deal.
‘Whilst there has been misleading speculation surrounding the potential sale in the last few days, we wish to be clear to employees, suppliers, and customers that it was not possible to conclude a sale as the potential purchaser could not, despite repeated requests of them to do so, adequately demonstrate that they had the funding needed to recapitalise the business and keep it solvent,’ the administrators said. ‘Due to current market conditions, an alternative sale or additional funding could not be secured. As a result, the directors made an application to court to place certain UK trading entities of ISG in administration.’
Following this, in an email that was sent out to staff on Thursday, which was first reported by Construction Enquirer, Zoe Price, chief executive of ISG, offered her deepest apologies and explained the situation had sparked from large lossmaking contracts secured between 2018 and 2020.
She said: ‘Trading out these projects has had a significant effect on our liquidity. So even though we have been profitable this year, our legacy has led us to a point where we have been unable to continue trading.’
In related news:
Irish housing company ditches hibernation to deliver new homes
