Surrey firm Bellwater badly affected by losses after the Swedish police investigate alleged fraud
The British arm of fit-out firm Bellwater has collapsed after the discovery of losses in its Swedish business and the start of a police investigation there into alleged fraud. It went into administration last Friday.
Stephen Sproat, chief executive of Bellwater, would not disclose the exact sum missing but he said it was a “substantial amount of money”.
The Swedish business, which accounted for about 50% of Bellwater’s turnover, went into liquidation in November after the losses were discovered.
Sproat said that as a result of the Swedish collapse the British firm had to shoulder £750,000 in costs. The impact meant the UK business could no longer trade, according to Sproat.
He said: “The profit contribution from Sweden affected the balance sheet so much that our credit rating fell, the banks pulled out and it all crumbled.”
Pricewaterhouse Coopers and Jackson Norton were called in as joint administrators after talks with two potential buyers of the UK business fell through. One was thought to have been Mace.
Bellwater is the third UK fit-out company to go into administration in the past six months; the two others were Spectrum and Benson.
Sproat said that the situation was frustrating because Bellwater had recovered from two bad years in 2002 and 2003, and had returned to profitability. He said: “We had turned the corner. Bellwater in the UK was the group holding company and it bore the brunt of any negativity.”
Bellwater employs 50 staff at its headquarters in Epsom, Surrey. Most have been made redundant.
The European and Asian arms of Bellwater were functioning normally this week. The Spanish business is in the throes of a management buyout.
PWC and Jackson Norton are managing the UK business. They are selling off the firm’s projects .
Mace, which declined to comment, is thought to be in talks with the administrators to buy some of Bellwater UK’s existing projects.
A spokesperson for PWC said: “The company was hit particularly hard following the liquidation of the Swedish subsidiary which was due to local management issues hitting the company’s cash flow which has left the overall group in quite a vulnerable position.”
The fate of UK fit-out firms
4 August 2004 Spectrum Projects calls in receivers as the 2002/03 collapse of the London commercial market takes its toll and cuts turnover 20%
30 November 2004 Benson’s Midlands arm goes into receivership
13 December 2004 Benson group placed into administration after a £10m deficit
November 2004 Bellwater’s Swedish business goes into liquidation after alleged fraud
14 January 2005 Bellwater’s UK arm placed into administration as Swedish scandal hits balance sheet