Sunday 23 February 2020 1:39 pm

Recruiter Cordant scrambles to raise cash after clash with lenders

Cordant, one of the largest recruitment agencies in the UK is rushing to raise new cash after coming close to collapse following a row with its lenders. 

The company, whose clients include Lloyds, Amazon and Tesco, is racing to secure a deal with investors that would end the majority ownership of the Ullmann family, who have controlled the business since its foundation in 1957.

Read more: Chief executive of recruiter Staffline resigns after string of profit warnings

Cordant’s biggest shareholder, Phillip Ullmann, is set to retain his role of “chief energiser” under the deal, but it is likely a new chairman will be appointed.

The recruiter was left close to collapse after one of its lenders refused to refinance a debt facility. Cordant’s lenders include the Royal Bank of Scotland, Barclays, and Dutch bank ABN Amro, but it is known which of the banks denied the request. 

The possible change in ownership, first reported by the Sunday Times, could derail Cordant’s plan to become the largest social enterprise in the UK. 

In 2017, Ullmann announced that executive pay at the group would be capped at £400,000 — 20 times that of its lowest-paid employee — and that annual dividends to its owners would be capped at £3m.

A year later, Ullmann said “Capitalism isn’t working any more,” adding: “It serves shareholders and the elite, and we have a duty to change that.”

Cordant is two months’ late filings its annual accounts with Companies House. The group’s last available accounts show it made an operating loss of £12.2m, an increase of almost 160 per cent on the previous year’s loss of £4.7m. 

Read more: Struggling recruiter Staffline warns on profit

A spokesperson for Cordant said it had been “working closely with management and shareholders to secure partnerships with key investors in the sectors” and was “nearing the end of that process”.

“The prospective purchasers of the business are keen to embark on an exciting new phase of the Cordant Group’s 60-year journey, and support our vision for future growth in the UK, Europe and overseas,” it added.

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