Carillion, Mears and Kinetics among those talking to administrator as it emerges contractor owed suppliers £100m
More than 10 contractors are wrestling to take control of parts of listed builder Rok after it collapsed on Monday owing suppliers and subcontractors £100m.
A source close to the sale process said that, despite receiving more than 100 expressions of interest in parts of the 3,800-strong company, which specialises in social housing, repairs and insurance work, only 10-15 companies had been shortlisted to take on its three divisions.
An industry source also close to the sale said that one of the most hotly contested divisions, Rok’s social housing business, had been narrowed down to a fight between contractors Balfour Beatty, Carillion, Kinetics, Mears and Mitie. Bosses from the firms had travelled up to the social housing head office in Burnley to hammer out a deal yesterday.
The source said: “They’ve speeded up the sale process because insurers are already threatening to take their business elsewhere, and it could affect the value of the business.”
Contractors including Leadbitter are also thought to be looking at parts of the Rok business. Morgan Sindall is thought to be among those in discussions with individual Rok clients over some of its contracts. It is understood Morgan Sindall ran the rule over Rok a fortnight before its collapse, but did not pursue a bid owing to the company’s high levels of bank debt.
PwC partner Mike Jervis, leading the administration, said Rok owed suppliers £100m in total. This is less than half the £206m owed at the time Rok’s last interim results up to June 2010, a reduction due to huge drop off in Rok’s business in recent months.
Sources said the firm had suffered from contract cancellations, tightening credit lines and loss of supplier and customer confidence since a profit warning in August following an investigation into its plumbing, heating and electrical business. A source said: “It looks like their turnover fell off a cliff in the last couple of months. The social housing part doing several hundred million turnover was down to around £150m.”
Jervis admitted turnover had fallen in recent weeks, and said several buyers were seriously looking at buying one of the three divisions or the whole business. He said: “We want to conclude a sale very quickly, as early as Friday, through to Monday.”
The news follows the announcing of 711 redundancies at the firm yesterday, mostly in the firm’s Build business, part of the maintenance and improvements arm. Jervis said the redundancies were concentrated in areas that had received little interest from prospective buyers.
