More than 2,000 jobs axed as UK prison builder ISG collapses | Construction industry

Greater than 2,000 jobs have been axed and dozens of presidency building tasks could possibly be paused as ISG, one of many UK’s largest contractors, fell into administration.

Within the largest collapse of a UK building firm since Carillion, directors EY confirmed on Friday that ISG had ceased buying and selling with instant impact, with the closure of all of its websites.

It confirmed that many of the 2,400 individuals it employed within the UK can be made redundant with instant impact, with solely 200 workers retained to help directors.

ISG is concerned in 69 reside central authorities schemes, together with a number of tasks as a part of the Ministry of Justice’s plan to extend the capability in Britain’s prisons by an additional 20,000 areas. Additionally it is engaged on schemes for the Division for Work and Pensions and a number of other college constructing tasks.

The Cupboard Workplace mentioned it had applied “detailed contingency plans” and departments have been working to make sure websites have been secure and safe.

ISG is the sixth largest building contractor within the UK by turnover, with revenues of £2.2bn. In 2018, Carillion, the UK’s second-biggest contractor, collapsed owing suppliers £7bn.

EY mentioned it had been appointed as administrator to ISG’s eight buying and selling titles, and ISG’s full UK building companies had ceased to commerce with instant impact.

It mentioned the UK enterprise had skilled vital liquidity constraints in latest months and due to market circumstances a sale or further funding couldn’t be secured.

In an e-mail to workers on Thursday, first reported by Development Enquirer, ISG chief govt, Zoe Worth, apologised and mentioned the group’s cashflow was affected by giant lossmaking contracts secured between 2018 and 2020.

She added: “Buying and selling out these tasks has had a major impact on our liquidity. So though we’ve been worthwhile this yr, our legacy has led us to a degree the place we’ve been unable to proceed buying and selling.”

In addition to the closure of its workplaces and building websites, subcontractors have been stood down from their work.

Knowledge from the development analyst Barbour ABI has estimated that ISG is concerned in reside authorities building tasks value £1.8bn. These embrace 22 reside tasks with the Ministry of Justice, together with various jail schemes such because the £300m extension to Spring Hill, in Buckinghamshire.

This comes solely weeks after the federal government let loose 1,700 offenders early to ease overcrowding.

ISG additionally has contracts with high-profile personal shoppers similar to Apple, Google and Barclays.

There have been studies earlier this yr that the corporate was going through cashflow issues, and the chief govt, Matt Blowers, and the finance director, Karen Sales space, left the corporate in February and March respectively.

In July, it reported that it had discovered a possible purchaser, with the funding agency Antipodean Holdings in discussions over a takeover.

Antipodean Holdings mentioned in an announcement on Friday that it was able to strike a deal to safe jobs and was dedicated to a deal till ISG stopped speaking with it on 12 September.

Addressing this, the directors mentioned: “We want to be clear to workers, suppliers, and clients that it was not potential to conclude a sale because the potential purchaser couldn’t, regardless of repeated requests of them to take action, adequately show that they’d the funding wanted to recapitalise the enterprise and preserve it solvent.”

It added that administrators additionally checked out refinancing the corporate however have been unable to finish this.