Social housing firm Connaught in ‘shock’ collapse

Devon-based social housing group Connaught is set to appoint KPMG as administrators after suspending their shares last night, the Financial Times has revealed.

The company said in a brief statement “availability of additional funds from its lenders will not be forthcoming” and “the ability to provide an adequate solution to the funding issues [it] faces has become increasingly uncertain.”

During the past two months, Connaught’s share price has dived from 320p at the end of June, to 16.5p before last night’s suspension.

A source reported by the FT as being close to the company said the decision to appoint administrators was a “shock”.

KPMG, which hasbeen providing the lenders with restructuring advice over Connaught’s estimated £200m of debts, were named as the likely administrators according to the FT.

In June, as local authorities deferred capital expenditure, Connaught warned 31 contracts would be affected and slashed profit forecasts by more than a fifth. The Royal Bank of Scotland provided a short-term overdraft facility in July as the group signalled an urgent need for funds.