Amount creditors left out of pocket by NMCN implosion doubles to £115m

The amount collapsed building and civils firm NMCN owed subcontractors and suppliers has nearly doubled to more than £115m, an administrator’s progress report has revealed.

The previously published figure, detailed in October last year, the same month NMCN, which had a turnover of £405m in 2019, collapsed after 75 years of trading, was £60.5m.

It was thought around 2,400 firms were owed money but in its latest report administrator Grant Thornton said “in excess of 3,000 unsecured creditors” were missing money. It added there was little hope of those firms seeing any of their money repaid.

NMCN blamed problem water contracts, losses on building contracts and the impact of the pandemic for its demise. Its fall was the biggest collapse of a listed contractor since Carillion imploded more than four years ago.

Most of the company was picked off by rival firms with business rescue specialist Svella, which had been waiting in the wings most of last summer to strike a refinancing deal with the contractor, picking up its telecoms business, while Galliford Try snapped up the water business for £1m while Keltbray took on parts of the infrastructure business.

The deals saved 1,642 out of the 1,789 jobs that were under threat. But 99 staff, mostly from the firm’s loss-making building business, were handed their P45s. A further 48, who were asked to help out with the administration, went in early February.

The latest report said that secured creditor Svella, owed £12.7m, is expected to get its money back while a bridging loan of £5.4m has already been repaid to Reflex Bridging.

Preferential creditors, mainly the firm’s former employees, are owed £380,000 which is expected to be repaid. Grant Thornton said £2.25m of employee claims had been mitigated as a result of the deals with Svella, Galliford Try and Keltbray.

Before its collapse, NMCN had been hoping to tie up a refinancing with Svella but the rescue deal hung on the contractor being able to file its delayed 2020 accounts by a date last November which it conceded defeat on when it filed for administration in the first week of October last year.

NMCN, which first alerted the market to the impending problems September 2020 when it announced former chief executive John Homer was leaving with immediate effect, later said that the losses it was facing for 2020 were at least £43m. It added that it would remain in the red for 2021 as well.