Connaught "on brink of administration"

 
City A.M. Reporter
Connaught, the property services group that specialises in social housing, is on the brink of going into administration, the BBC has reported.

The company, which employs 10,000 people, has suspended trading of its shares, and said a further announcement would be made "in due course".

Connaught has £220m of debt, provided by six banks and four other creditors.

But it said discussions to secure further funding had been unsuccessful.

"Connaught has had continuing discussions with its lenders and other sources of finance with the objective of securing additional funding and a restructuring of the group's financing for the longer term," the company said in a statement to the London Stock Exchange.

"The group now believes that the availability of additional funds from its lenders will not be forthcoming and, whilst it remains in discussions with other parties, the ability to provide an adequate solution to the funding issues the group faces has become increasingly uncertain."

Connaught was hit by a series of loss making contracts.

Royal Bank of Scotland recently provided Connaught with a further £15m.

However, its bank creditors have now decided instead to put the business in administration, under UK insolvency procedures, according to the reports.