Social housing firm Connaught in ‘shock’ collapse
KPMG expected to be appointed as administrators as Devon-based housing group suspends shares
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.