Building firm’s £9m debts after collapse
ASKELMERSDALE construction firm owed suppliers more than £9m when it collapsed earlier this year.
Construction Partnership UK (CPUK) fell into administration in April and the extent of its financial problems have now been made clear by the firm handling that process.
A report from administrators Duff and Phelps explains that as well as the impact of the Covid-19 pandemic, one of the main reasons for its collapse was “contractual issues” arising over the past year – involving losses on a number of contracts.
The biggest of those, the report said, was the failed student accommodation development which should have seen a seven-storey building erected.
The project stopped in April 2019 when the firm behind the scheme, Hill Top
Rise Ltd, ran into its own financial crisis.
According to the report, the demise of The Rise meant that CPUK was left with £3m of bad debt.
It said that it came after CPUK was seven months into the contract work – and had completed works to the value of around £7m “when the company began to experience delays in payments and processing of certificates”.
The report filed to Companies House added: “This was largely due to the funder of the development being placed into administration itself and works on the project were eventually suspended in April 2019.
“The developer advised the company in early 2020 that attempts to refinance the development had been unsuccessful and that the employer was unlikely to be able to meet its obligations to the company and that the development could not be completed in the foreseeable future.”
The report said that CPUK owed more than £9m to trade and expense creditors when it fell into administration in April.
It added that while it was “likely” that there would funds paid out, the amounts of any payments were “currently uncertain”.
CPUK had been trading for more than 20 years, employing 94 staff from its Skelmersdale base.
As well as The Rise, it worked on various projects worth up to £25m in the Midlands and the North.
But its situation had been made worse by the impact of the coronavirus pandemic, which caused sites to close, with CPUK also using the Government’s furlough scheme.
Following administrators being called in, other funding options were considered, but none found, the report said, aside from a bridging loan.
Expressions of interest were requested at the end of April for the sale of the business, but no formal offers were received.