Contractor ISG is set to collapse, in the biggest corporate construction failure for several years. Here is what the firm鈥檚 chief executive said to staff last night.
ISG鈥檚 chief executive Zoe Price has confirmed that the 拢2.2bn-turnover contractor is set to go into administration and told staff that offices will be closed from today while sites will also be shut.
A deal to sell the business to a would-be buyer did not materialise.
The collapse is the biggest corporate construction failure since Carillion subsided six years ago and is set to see an administrator, believed to be EY, appointed shortly.
Below is the full text of Price鈥檚 email to ISG鈥檚 staff last night:
鈥淪ome of you may have seen reports in the media that ISG has filed for administration here in the UK. With sadness, I can confirm that this is factually correct.
This was not the way I wanted you to find out and the news should not have leaked in this way. We had a managed plan to tell you what was happening on Monday once we had more clarity, but news has leaked at the filing stage 鈥� and that is why I am writing to you tonight.
Before I go into any more explanation, I want everyone to know that 鈥� contrary to the press reports 鈥� you will be paid on Monday as normal. I appreciate this is only a small comfort against a context of uncertainty for you all in terms of what happens next.
鈥淭he group鈥檚 trading and cash performance has been impacted by legacy issues relating to the large loss-making contracts鈥�
You are owed an explanation of what has been happening over recent months. I know there has been speculation and rumour for some time, and we have tried everything to save ISG from this situation. And I know there must have felt a lack of communication. The truth is that every communication we have done has been leaked to the press by a very small minority, which has not been helpful as we have worked to rescue ISG. And that is why we have been very cautious in the past couple of months.
By way of background, the group鈥檚 trading and cash performance has been impacted by legacy issues relating to the large loss-making contracts secured in between 2018 and 2020 (primarily in the residential, logistics & distribution sectors as well as some data centre projects). Trading out these projects has had a significant effect on our liquidity. So even though we have been profitable this year, our legacy has led us to a point where we have been unable to continue trading.
I want you to know there have been significant efforts made to secure a sale of the Group over many months. While there has been speculation for some weeks now, I can confirm that it was not possible to conclude a sale, as the purchaser could not satisfy the funding needed to recapitalise the business. Cathexis also looked at refinancing the company in recent months but has been unable to execute.
We also looked at selling individual business units to third parties but again, we have not been able to conclude these negotiations in the timescale.
This has left us no option but to file for administration. Again, I am so sorry to have to share this news.
鈥淲e also looked at selling individual business units to third parties but again, we have not been able to conclude these negotiations in the timescale.鈥�
I know all of you will still hold onto what is important at this time, whether that is ensuring we keep people safe, supporting colleagues, or managing clients and subcontractors.
If you are site based:
- Sites will not open tomorrow.
- You are not required to come to site.
- We will be standing sub-contractors down and there will be a controlled process for them to recover plant and tools once the administrators are formally in place. They will be notified when this is possible.
- Sites must be left secure and safe at all times.
If you are office based:
- Offices will be closed.
- You will be notified when you can come and collect your things.
- Some individuals will be admitted should there be a requirement from the administrators for them to do so.
Once again, I am so sorry to have to share this news. Thank you for all your support as an employee. The next step will be the appointment of the administrator and we will be in touch soon about what this means and how you can get the information you will need looking ahead.鈥�
>>See also: ISG鈥檚 collapse: a huge blow to construction that raises urgent and difficult questions
>>See also: Offices closed and sites shut as ISG set to file for administration, chief executive confirms
>>See also: ISG firms set to go into administration
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