Tuesday, Sep 07, 2010
Exeter-based social housing company set to go under
BBC: Social housing group Connaught 'nears administration'
Connaught, the property services group that specialises in social housing, is on the brink of going into administration, the BBC has learned. The company, which employs 10,000 people, has suspended trading of its shares, and said a further announcement would be made "in due course". Connaught has £220m of debt, provided by six banks and a quartet of other creditors. But it said discussions to secure further funding had been unsuccessful
Posted by jack c @ 09:00 AM (976 views) Add Comment
8 Comments
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1. mark said...
you beat me to it jackseeeeeeeeeeeeee
2. cyril said...
This is the BBC's 'most read' story so it must have a few people worried.
It's on the same day that Bob Diamond gets his promotion and some other bank geezer gets a job as a government minister.
Lets hope Connaught is a one-off otherwise the banks will be looking for some more taxpayer's money to make good their bad loans.
3. mark said...
whats interesting is connaught is reliant of councils for its work
4. uncle tom said...
£22k debt per employee is not that high for a business..
..I wonder where they've gone wrong..?
5. tudorian said...
drip, drip ,drip ........
every day more bad news
Last night( in S West ) directly after the national BBC news feature about the coming government spending cuts, we were treated to the local news .. leading on spending cuts (40% of the working population of Taunton are public workers!)
Even Mrs T was a littles rumbled.
As I write this a Connaught just stopped opposite !
6. drewster said...
This isn't really a recession story. Connaught is simply a company that grew too fast using borrowed money. It's easy to grow a company from nothing if you can persuade the banks to lend you money to make acquisitions, but all you end up with is a group of badly-merged companies and a huge amount of debt. It's like private equity, only this time with a public company.
Perhaps if there hadn't been government cutbacks, Connaught would have survived; but it was certainly skating on thin ice.
NB: MoneyWeek explained the problems with Connaught a few weeks ago:
MoneyWeek: The deadly accounting trap that can destroy your investments
7. Jonboy2010 said...
Its like the late 80s early 90s all over again.
8. tenyearstogetmymoneyback said...
It makes you wonder what value companies like this add.
It makes me think of our local Leisure centre which was run by a private company (on behalf of the council) for quite a few years.
During this time they creamed off the profits while standards slipped and ther was no investment. At the end of the contract the
council took it back and it is now far better.