Contractor gives up on final payment for £27.5m stadium after football club calls in administrators.
Contractor Birse has been forced to write off £5.5m in bad debt after Leicester City FC was put into administration on Monday.

The amount is what Birse is owed from its £27.5m contract to build Leicester City's Walkers Stadium, which was completed earlier this year. The cost of the ground and Leicester City's relegation from the Premiership helped to force the club into administration.

Birse will report the £5.5m as an exceptional operating charge in its interim results on 31 October. Managing director Martin Budden said: "This decision by Leicester City is regrettable. However, Birse is in a stronger position than in previous years due to the actions undertaken by management, and we continue to progress with our underlying business."

A Birse spokesperson said all subcontractors and suppliers it employed on the project had been paid in full. But Elequip, a Leicester-based firm that did the M&E engineering installation on the stadium, claimed it was in talks with Birse over further payments.

Peter Birchall, Elequip's project manager for the stadium, said: "We are still in negotiations with Birse over the variation account."

The M&E firm had an initial contract valued at just over £5m. Changes to the stadium led Elequip to ask for this to be raised to £5.8m in the variation account. Birchall telephoned Birse on Monday to ask if Leicester City's difficulties would affect this arrangement, but said he was still unsure of his position.

The stadium's overall project manager, DTZ, was paid by Leicester City itself. DTZ director Martin Baxter confirmed that the company had been paid in full.

Market sources suggested that the developments may put a cloud over Birse's bids for other stadium projects. Birse is one of seven contractors pitching for Liverpool FC's new ground.

Architect on the Leicester City stadium was the Meller Partnership, quantity surveyor was Gleeds and engineer was WSP.