Details of money owed to firms, including Lafarge and BRC, listed in administrator document seen by Building
PC Harrington Contractors fell into administration owing more than £10m to suppliers and trade creditors, according to a document prepared by its administrator and seen by Building.
The figures come from an initial estimate of the financial position of the firm contained in a joint administrators’ proposals document prepared by administrator KPMG. External creditors include manufacturer Lafarge Tarmac Trading, to which PC Harrington Contractors (PCHC) is estimated to owe £2.5m, and steel reinforcement supplier BRC, which is owed £2.1m.
The estimate of the firm’s financial position, prepared ahead of a full statement of affairs which is expected to be released imminently, lists £11.9m of debts to external companies. It also says that £16.4m is owed to other companies in the PC Harrington Group, which are not in administration.
In the administrators’ proposals document, dated 4 June, PCHC is said to have experienced contract disputes and suffered losses on a number of major contracts, leading to cash flow becoming increasingly constrained. KPMG declined to comment on which the jobs were. The firm had already ceased to trade by the time the decision was made to appoint KPMG as administrator on 27 April.
The document also showed that PCHC itself is believed to be owed significant sums from its clients and KPMG has enlisted consultant Leslie Keats to assist with the collection of these monies.
At the time of KPMG’s appointment PCHC had only £900 in cash in its two bank accounts. However, a further £49,800 has been recovered by KPMG from solicitors holding it on behalf of the company and a VAT refund of £643,000 was received shortly after KPMG’s appointment.
Building can also report that a firm called Crystal Formwork, owned by the Harrington family, which provided labour to PCHC, was also placed into liquidation on 8 May, following a failed company voluntary arrangement.
PCHC had no direct employees and used Crystal Formwork, a company held under common ownership by the Harrington family but not part of the PC Harrington Group, to employ labour. The KPMG document makes clear that Crystal Formwork will be responsible for final pay and redundancy for employees.
A spokesperson for KPMG said “the majority” of Crystal Formwork’s staff were “transferred to [group company] Structural Systems prior to the appointment of liquidators and the balance were made redundant.”
The document says PCHC’s main tangible asset was a fleet of 15 cranes valued at £1.93m, which was sold to Wolffkran as part of the sale of its tower crane subsidiary HTC. The document also says that Endless, a private equity investor, had been interested in purchasing HTC, but this did not come to fruition.
Endless did agree to refinance the group’s secured debt of £8.5m in the short-term in April. At the time of KPMG’s appointment Endless held £9.5m of debt across the group. None of this debt is lent directly to PCHC, but is secured by cross guarantees provided by the firm and the other group companies.
KPMG’s administrators’ proposals say Slipform International, a subsidiary company of PC Harrington Holdings and one which PCHC owned a small quantity of plant and shares in, will be “marketed for sale in due course”.
PC Harrington Group declined to comment.