Move comes as architect, rated UK’s sixth largest in 2010 by Building, fights insolvency threat

Architect Austin-Smith:Lord (ASL) has taken the decision to close its Abu Dhabi office as the firm remains on the brink of insolvency.

The firm is attempting to broker a deal with its creditors because of late payments from a client in Abu Dhabi, which has forced it to close its office in the emirate. It employs about 180 staff and was rated as the UK’s sixth biggest architect in Building’s consultant league tables in 2010.

ASL is owed more than £10m from a state-owned firm in Abu Dhabi. The firm appointed ASL to work on a huge cultural quarter project in the city centre.

The closure of the Abu Dhabi office, which will result in 13 staff being laid off, brings the total who have been made redundant in recent days to 83.

This includes 40 staff from ASL’s London office who were working on the project and were laid off last week. A further 30 staff were let go in UK regional offices as the company adjusts to a more London-focused market.

The firm has appointed accountant BDO to broker a company voluntary agreement (CVA) with its bank, subcontractors and other creditors by 28 November. The CVA would allow ASL to pay its debts off more slowly than is planned, allowing the business to continue trading.

Director Neil Chapman said dealing with the debt would allow the business to refocus. “Our order book in the UK is looking healthy, the problem is we couldn’t focus on those projects while we have been dealing with this,” he said.

Chapman said the proposed CVA did contain plans for a worst case scenario where ASL would not be paid by the Abu Dhabi firm but would still be able to trade.

He said he was optimistic that the Abu Dhabi client, which is not contesting the £10m owed, would pay by 28 November and the need for the CVA would be avoided.

Chapman said it was a regrettable but necessary step to close the Abu Dhabi office because all staff there were working on the project, which has now stopped.

“We have been asking the client to see if they could take them on either as consultants or as direct employees,” he said.