HOUSING repair firm Connaught formally appointed KPMG as its administrator yesterday, as rival property companies looked to take over the collapsed firm’s contracts.
KPMG will keep the firm’s property maintenance arm trading until it has farmed out its contracts to other providers. Around 4,400 people face redundancy.
Richard Heis, joint administrator, said the group had also received numerous expressions of interest for Connaught’s surviving operations. The smaller compliance and environmental divisions, which employ 3,500 people, are unaffected by the administration proceedings.
Rival firm Mears said before the collapse it was keen to take on Connaught’s outstanding contracts. “We are watching the situation carefully and we are obviously in a position to pick up any work others are not able to complete,” chairman Bob Holt told journalists.
“We have spoken to Connaught advisers. We have spoken to a number of people in the sector about it”.
Shareholders are expected to be wiped out in the administration proceedings. However, reports yesterday said fund manager Tim Steer at Artemis made a handsome profit after beginning to short Connaught stock last year. The firm’s shares lost more than 90 per cent of their value after June’s profit warning.
KPMG said it will decide on job cuts as soon as possible.
RESTRUCTURING PARTNER, KPMG
RICHARD Heis has plenty of experience in the most recent recession; he worked with Landsbanki Securities when its Icelandic parent went under in 2008, sending shockwaves through the world’s credit markets that can be felt today.
He joined KPMG in 1983 (in the teeth of another global recession), and became a partner in 1997.
During his time at KPMG he managed the Trocadero shopping centre in London for two years, and worked on formal insolvencies at Japan Leasing, Barings Bank, Dunfermline Building Society and the New Millenium Experience Company, which was the former owner of the Millenium Dome.
Joining him from KPMG are head of middle market Richard Hill and head of personal insolvency Richard Fleming.
Mark Firmin, Brian Green and David Costley-Wood are also involved with Connaught’s property subsidiary.
Firmin was appointed head of restructuring in the North of England 2009, and has worked on the insolvency of catalogue retailer Empire Direct.
Green has acted as administrator for Kwik Save and shoe shop Dolcis, while Costley-Wood has worked on First City Insurance and JJB Sports in recent years.
Denton Wilde Sapte is providing legal advice on the administration, with Graham Paine and Nigel Barnett as lead partners. The law firm was advising Connaught’s lenders including RBS before the collapse.