Surrey-based M&E contractor falls into receivership as payment problems hit home.
M&E contractor RTT Group has been forced to call in administrators after suffering payment problems on a series of large contracts.
The Surrey company, which has a turnover of £40m, called in administrators Price Waterhouse Coopers last week. RTT Engineering Services has now reformed as RTT Services Group, although a subsidiary, RTT Maintenance and Special Projects, has been closed down.
RTT has worked on a series of large projects, including Gatwick airport, the Chichester hospital PFI and the House of Commons. The company, which employs about 350 staff, was also undertaking work for Honeywell on Heathrow Terminal 5 when it entered receivership.
RTT chairman Trevor Koch said: "RTT Group fell into receivership on 17 March. We have recently been left owing a substantial amount of money on a PFI hospital in Wiltshire, and the bank refused to extend our credit. We have purchased assets and our live jobs from the receivers, and have saved 300 jobs."
RTT subsidiary Mechelec was rescued from receivership by a buyout. However, 17 jobs have been lost by the closure of RTT Maintenance and Special projects.
Building understands that the newly formed RTT Services Group has also struck a deal with receivers to enable it to continue to chase retentions and the final payments on contracts owed to the dissolved RTT Group.
RTT is understood to have suffered a series of financial problems related to retentions and insolvencies higher up the supply chain. The firm was owed £431,000 by fit-out firm Benson when it collapsed in December 2004.
Last year Mechelec began asking some clients for a prior payment to protect it from employer insolvency.
Companies House accounts for the financial year ended 31 December 2003, the last available financial data on the firm, show that it had made a pre-tax loss of almost £900,000 for the year.
The accounts also show that the firm was owed £11.6m.
RTT's situation will strengthen calls from subcontractors for upstream insolvency and other payment problems to be addressed by the review of the Construction Act.
RTT Group was bought back from its former parent, the Israeli company Electra, in December last year. Electra took a 62% stake in RTT in July 2001. It is understood that it gave RTT financial help to enable it to trade after the buyout.