Two highway firms hit difficulties

20th Mar 2019

Construction firms Interserve and Dawnus have entered administration. This week Interserve completed a sale of the business and assets to a new company controlled by lenders to provide additional liquidity. All companies in the group other than the parent company remain solvent and it is said that jobs will be protected and work will continue as normal.

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The firm was recently tasked by Transport Scotland to realign a stretch of the A737 and carries out civil engineering for Highways England’s construction works framework in the North West. A Highways England spokesman said: “We do not anticipate any disruption from the recent developments involving Interserve.”

Joint administrator Hunter Kelly from EY said: “It was clear that any period of uncertainty would have resulted in a collapse across the group.” He added that a contingency plan helped to secure “the jobs of 68,000 employees, the majority of whom work in the UK, as well as ensuring there was no disruption to the vital public services that Interserve provides to the UK Government”.

Dawnus, which employs 700 people across six offices, has appointed Grant Thornton UK as administrator. The firm was part of a consortium involved in the Cardiff Eastern Bay Link road project, and two years ago won a highway maintenance and street lighting contract in Anglesey.

Restructuring partner Alistair Wardell said the business was placed into administration due to financial difficulties, stemming primarily from the downturn in the construction industry. He added that uncertainty over Brexit impacted the ability to rescue the business.

“Our priority is to work with management to ensure that any impact on customers, employees and creditors, including subcontractors, is minimised,” he said. “That process is at its early stages and key employees continue to be retained to support the required procedures.”

A senior figure in the highways sector described the difficulties faced by Interserve and Dawnus as “a serious concern for the UK construction industry” which continues to face “shrinking margins and ever tightening procurement”.

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