Confidential documents reveal true extent of contractor's financial plight as it was reassuring subcontractors
Confidential documents obtained by 好色先生TV have revealed the severity of Ballast's financial difficulty in the week leading up to its Dutch parent's statement of support on 11 September.

The documents, which include the minutes of board meetings and an outline of the firm's public relations strategy, include the following information:

  • Ballast chairman Ruud Jacobs, who had been drafted in as a troubleshooter by Ballast Nedam, said the company's cash position "awful".

  • A briefing note, believed to be drafted by Jacobs, blasted Ballast for having a culture of "little kingdoms", and stated the need for "improved openness and honesty".

  • Jacobs said that the 11 September statement was "the final time" that Nedam would provide public backing for Ballast.

  • The board hoped that outsourcing specialist Mapeley would buy Ballast Services, the firm's profitable PFI arm, by the end of September.

  • Regional managing directors were told not to mention the Mapeley offer to their customers.

Ballast's administrator, Deloitte & Touche, which was brought in after Nedam decided to stop financing its subsidiary in mid-October, has now sent a document to creditors detailing Ballast's financial position. It estimates that at most 拢500,000 will be available for unsecured creditors 鈥� which are owed more than 拢30m. This does not include administration costs; Deloitte estimates that its fee is more than 拢1m.

拢30m would be required to enable Ballast to continue to trade to the end of 2003

Leaked minutes of a Ballast board meeting on 5 September reveal that the company was then already close to insolvency: "Jacobs said that our cash position was awful."

Also in the minutes, Jacobs said senior people should be told about the Mapeley bid for the services division.

But in a confidential briefing note to regional managing directors on 10 September, they were told that if clients asked about the long-standing attempts to sell the overall business, which was given up in August, they should say: "It has been called to a halt. Please note: it is essential for statutory reasons that you do not mention any plans for the services division."

The regional managing directors were told that customers could be reassured that Nedam would provide Ballast with "substantial financial support" to meet what was owed to them.

The Deloitte document shows that Nedam pulled the plug on Ballast after its board submitted business plans in early October. It said: "These showed funding of 拢5m being required for the following two weeks and that 拢30m would be required to enable Ballast to continue to trade to the end of 2003."

An internal email dated 10 October shows that, in recent years, Nedam signed 43 bonds, worth 拢33m, and gave more than 90 guarantees of delivery, worth 拢50m, on Ballast projects.