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Finance woe puts building jobs at risk
SEVERAL hundred South Yorkshire jobs today hang in the balance after a national building contractor suspended its shares.
Connaught, based in the West Midlands but which has had contracts to upgrade council housing in Sheffield and Rotherham, and retains a large electrical testing operation on Bradmarsh Business Park in Rotherham, is believed to be on the brink of going into administration.
It follows shares losing about 95 per cent of their value - collapsing to just 16.65 pence from 3.30 - since it emerged in June that 31 of the firm's contracts would be hit by public sector spending cuts.
Connaught has been forced to borrow money from six banks and four other parties, including 15 million from Royal Bank of Scotland - but a long-term rescue plan is thought to have been rejected by creditors.
A Connaught statement said: "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 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 has become increasingly uncertain.
"Accordingly, pending clarification of the company's financial position, Connaught has requested a suspension of the trading of its shares on the London Stock Exchange with immediate effect."
Staff at the Rotherham site were not allowed to talk to reporters but the partner of one worker said: "We've been worried for some time.
"Over the last few weeks staff lost fuel cards, so have had to pay themselves when re-fuelling vehicles, and they have been unable to claim back meals or hotel costs when they have been on work trips away."
The company, which is believed to have around 300 staff in South Yorkshire, is expected to issue a further statement on its situation today.
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Friday 10 February 2012
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