ISG, one of the UK’s biggest construction contractors, has gone into administration, putting more than 2,000 jobs at risk.
Administrator EY confirmed Friday that ISG ceased to trade with immediate effect. All of its sites were closed. This is the biggest collapse of a UK-based construction company since Carillion, in 2018. The company owed its suppliers PS7bn.
EY announced that the majority of the 2,400 ISG employees in the UK will be laid off with immediate effect.
ISG was involved in 69 active central government schemes. The Ministry of Justice has 22 major construction projects as part of its plan to expand the UK prisons’ capacity by 20,000 additional spaces. The company is also involved with school-building projects.
Administrators will only be able to retain 200 employees.
ISG, the UK’s sixth largest construction contractor by revenue, has revenues of PS2.2bn.
Barbour ABI, a construction analyst, has estimated ISG’s involvement in live government construction projects at PS1.8bn.
Construction Enquirer reported that ISG CEO Zoe Price sent an email to the staff on Thursday in which she said large contracts with losses secured between 2018 and 2021 were affecting cashflow.
She continued: “Trading these projects out has had a major impact on our liquidity.” Even though we were profitable this year our legacy has brought us to the point where we are unable to trade.
Subcontractors were also asked to cease their work.
Early in the year, reports suggested that the firm had cash flow problems. The administrator said that efforts to refinance the company and sell it had failed.
Subscribe to our weekly HR news and guidance
Every Wednesday, receive the Personnel Today Direct newsletter.
