The unpaid fees have led to cash-flow problems for nearly a year – in its last set of annual results, announced in November, High-Point Rendel posted a pre-tax loss of £2.5m and it has had to ask for extra time to repay bank loans.
A source close to the company said that it was still owed between £4-5m. The source added that economic uncertainty in the Middle East had further delayed loan repayments: "A lot of Arab governments wouldn't pay out because of the war in Iraq."
High-Point Rendel first announced that it was in talks with an unnamed bidder – known to be a management buyout team – last October. A source close to the deal hinted that the parties could not reach agreement, but added that they did not want to cease talks in case the bid could be salvaged.
The source said: "It is eight months on from the initial announcement and talks still haven't finished – you can read what you like into that, but it is a long time."
Paul Shackleton, an associate director at High-Point Rendel's financial adviser Bridgewell, declined to comment on the two issues, but said: "The bank is very supportive of the company and everyone believes that the situation will be resolved favourably in due course."
High-Point Rendel this week announced that its bank had agreed to extend the deadline for the repayment of a £2.9m loan by two months to the 31 July.
The company's directors and senior staff shored up the firm last year by temporarily sacrificing part of their salaries (see 29 November, page 21). They have yet to be reimbursed.
The problems have occurred despite the best efforts of a heavyweight non-executive board, led by chairman Tony Palmer. Palmer is also the chairman of Galliford Try and a former chief executive of housebuilder Taylor Woodrow.
The company's share price closed at just 3p on Monday – in 2002 it peaked at 60p.
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