Social housing contractor sheds 270 employees as it shuts northern business
Unpaid debts to subcontractors from collapsed parts of social housing contractor Kinetics will total less than £1m, according to sources close to the firm.
The £102m-turnover contractor shut down its business in the north of England last week with the loss of 270 jobs after the government forced its DC Group arm into liquidation over an unpaid tax bill.
Chief executive Chris Cheshire said most of staff laid off were likely to be transferred to contractors picking up the firm’s jobs or clients taking the work in house. He admitted there would be 50-60 people left out of work.
The restructure of the formerly 1,000-strong firm will see the group’s 20 businesses reduced to five. Kinetics’ backers, the venture capital firm Sovereign Capital, will create a new holding company called SCP Renewable Energy Ltd to run the group.
SCP bought out the assets of a number of Kinetics’ subsidiaries in a pre-pack administration last week which safeguarded 643 of the 1,000 jobs, and will shortly be renamed Kinetics Partnerships to allow the firm to continue to trade.
A source said unpaid debt to subcontractors “would not be in the millions”.
Cheshire said he could not confirm exactly how much suppliers would be owed by the companies put into administration, but that there would be assets to pay most of the debts. He said: “There will be debts other than HMRC; the nature of the situation means that it is regrettably unavoidable.”
As well as winding down all of its operations in the north of England, the firm is expected to retrench into its core gas and electrical servicing business.