Wrekin in administration

[GB_Groundworks]

http://news.bbc.co.uk/1/hi/business/7935357.stm

blaming rbs for calling in their overdraft, 600 more people looking for work in the construction sector

[Tommy]

They've been doing a culvert replacement at a major junction not far from home.

Its a four way junction, and is all on temp lights, as they've gone into the road with the replacement.


Now all the machines they've got on site and such have been parked up all week - and for the foreseeable

[lutonlagerlout]

bang goes our non woven fabric
poor guys
LLL

[flowjoe]

They asked me for a price before christmas on a city centre job, OKd it and said purchase order would follow.

I thought something was going tits up when the order didn`t arrive.

[Dave_L]

Bloody good job the order never arrived Joe!

[flowjoe]

Yes nice to be on the right side for once, but i suspect i will not be able to say the same thing by the end of the year.

[Asbury]

Another one bites the dust, up to 200 a day going under I heard.

[msh paving]

When David Unwin arrived as Wrekin Construction’s white knight two years ago it wasn’t £11m of cash he was wielding to save the stricken Shropshire-based group – as has been commonly assumed – but a giant gem stone with “a fair value of £11m�.
Wrekin bought the sparkler — known as “The Gem of Tanzania� — in a deal that saw the firm issue £11m-worth of new preference shares and handing them over in exchange.
In other words, there was no new money to turn around the company’s fortunes. Wrekin had racked up a loss of £9m in the previous year as a result of a disastrous expand-at-all-cost policy by the former owners.
However the £11m gem was a new asset that helped to transform the appearance of Wrekin’s balance sheet from an £8m liability (31 March 2007) to net assets of £6m (31 December 2007) – even though the only material difference was the £11m-worth of preference shares that had been issued


As one creditor affected by Wrekin’s collapse into administration told CJ: “Preference shares can be called in at short notice. It’s no wonder the banks were worried.
“We were as well. Wrekin’s credit rating had dropped from £500,000 before Christmas to £100,000, that’s what we heard from the credit rating agency we use.
“I was also talking to three other subcontractors who’d not been paid by Wrekin since before Christmas and I was aware of two County Court judgements against Wrekin in recent months.�
With Wrekin in urgent need of saving two years ago, the transformation was achieved when the glorious ruby gemstone appeared.
Its validity and worth came guaranteed, according to Wrekin, by a professional valuer at the Instituto Gemmologico Italiano, based in Valenza, Italy, on 31 August 2007.
Asked if it had ever sat innocently on his desk as a paperweight, Wrekin’s joint managing director Peter Greenwood said: “No.�
Has he ever even seen this elusive dazzler? “No,� again is the reply.
Greenwood says the Gem of Tanzania is tucked away in a safe deposit box in the UK.
Could the valuation be all a load of fiction? Apparently not as Wrekin has had it re-valued annually.
Why couldn’t it have been flogged off and the £11m used to save Wrekin and all its employees?
The answer is that the £11m-worth of preference shares had already been issued against its value.
Wrekin's saviour two years ago was stated at the time as being London and Middle Eastern Group. However that name never showed up in Wrekin’s subsequent accounts.
David Unwin owns London and Middle Eastern Group and operates out of an office in Lows Lane, Stanton-by-Dale, Ilkeston, Derbyshire.
Unwin actually bought Wrekin through one of his other vehicles, Tamar Group.
Tamar Group owns a whole string of operating companies:
Tamar Land and Property
London & Middle Eastern
Stanton Recycled Aggregates
HCL Equipment
Equatrak (UK)
Midland Land Recovery
The ultimate controlling party of Tamar is David Unwin.
On 1 January 2007 Tamar Group had net assets of £430,000 but ended the year with a net debt of close on £16m.
Contributing to Tamar’s soaring debts were:
cash outflow of £2.9m;
acquisitions (excluding cash and overdrafts) of £8.8m;
other non-cash changes of £4.4m.
Tamar’s turnover (12 months to 31 Dec 2007) was £38m (figure in 2006: £16m) and this produced a pre-tax profit of £3.3m (previous year: £350,000).
The gemstone makes an appearance in Tamar’s accounts, a revaluation being said to have put its worth at £10.7m.

from contract journal MSH

[Asbury]

Ouch!!

[msh paving]

Administrators for stricken contractor Wrekin Construction have confirmed a total of 400 redundancies have been made at the group.
Ernst & Young said the redundancies would be at Wrekin's offices in Shropshire, Yorkshire, Northamptonshire and Cheshire.
A skeleton staff of just 70 has been kept on at the group's Shropshire headquarters to help administrators "wind down the business", a spokesman for the accountants said.
Wrekin blamed Royal Bank of Scotland after it was placed in administration, saying the bank would not extend its credit to cover cash-flow, despite the firm having a healthy order book.

from contract journal MSH

[Mikey_C]

I take it one of the few assets will be the order book? Can someone now bid to acquire the contracts on the order book? However, I am also guessing that the bank wouldn't turn down lending to business that had a healthy order book -- providing the orders were from people likely to pay (i.e. government) or very profitable orders with big companies, where the debt can be chased with a good likelihood of getting paid and not losing all the profit.
Of course there are plenty of companies that will by AN invoice as soon as it raised (for a fee). Can't beat a company with a good cash flow though, however big companies don't like having cash "hanging around".