Schmidlin UK, the cladding contractor behind Heathrow Terminal 5 and the Gherkin, learns that Swiss parent company has gone bankrupt.
The future of the cladding firm behind Heathrow Terminal 5 and the Swiss Re tower is in the balance this week after its Swiss parent company filed for bankruptcy.
Schmidlin UK, which is working on the Stanhope/British Land scheme at 51 Lime Street and More London, heard last week that its parent firm Schmidlin Facade Technology had gone bankrupt after making losses of £5.7m on two key projects.
The news means the parent company is looking for investors to take it over, despite being recently awarded the facade construction contract for the world's tallest building, the Burj Dubai.
Mike Hollis, Schmidlin UK managing director, said: "Our parent company has filed for bankruptcy. We are still solvent and operating our projects and we still have men working on every site. We are working with all our clients, who have been very supportive."
Schmidlin's operations around the world were told last Tuesday about the problems, which threaten 747 jobs.
Last Wednesday the company said: "As a result of the financial situation of the company the wages for February can no longer be paid. No redundancy plan is on hand. The cantonal agency for industry, trade and labour KIGA will register the employees as unemployed persons."
Schmidlin employs 747 staff at its headquarters in Aesch, Switzerland and subsidiaries in London, Paris, Berlin, Wurzberg, Abu Dhabi, Dubai, Singapore and Shanghai.
The firm said: "The Schmidlin group pursues activities in a high-risk operating environment. Capacity planning and fixed-cost management (is) extremely difficult. Over the past 10 years the Schmidlin group was not able to secure sustainable profitability, the company has been massively in the red since 2003."
"Bankruptcy was brought about by losses incurred on major projects and by calculation errors that were only discovered after the introduction of a new accounting system. An unexpected loss of 13m Swiss Francs thus emerged from two projects. In addition, competition on the market has become significantly stiffer. The high pressure on margins made it increasingly difficult to apply prices appropriate to the risks involved."