A source close to the refinancing talks between Connaught and its banks this week said the firm was “optimistic” of a positive outcome provided no nasty surprises were uncovered

The troubled £660m-turnover social housing specialist warned last month that it would breach its banking covenants and has already had a £15m cash injection to tide it over. Deloitte is carrying out a review of the firm’s books.

The source said: “Connaught is optimistic but not complacent. It’s early days and things will be clearer in a couple of months.”

Meanwhile, market speculation grew this week that Connaught would sell its social housing business, leaving the better-performing compliance arm.

It is understood that FM groups Kinetics, which is backed by private equity, and Mitie would be interested in it. Kinetics declined to comment and Mitie denied its interest.