Deloitte & Touche, the administrator, has sent a document to creditors claiming that only £500,000 will be available for unsecured creditors – a fraction of the £30m total they are owed.
The victims include Ballast employers who have lost their pension contributions and subcontractors working for the Ballast Services PFI and facilities management arm. A number of firms have indicated that they will take legal action against the Dutch parent Ballast Nedam.
Nedam withdrew support from Ballast on 13 October after the company had lost £14.3m in the eight months up to 31 August. Nedam would have to have given Ballast £30m to keep it afloat.
Suppliers seeking redress will claim that a statement released by Nedam with chairman Ruud Jacobs' approval on 11 September was misleading. It said that Nedam would continue to support its loss-making Ballast arm, and on this basis many unpaid subcontractors decided to carry on working on Ballast projects. One even signed a further contract with the stricken contractor. Nedam now denies responsibility for any subcontractor losses. "It all falls under the administrator and Ballast," said a spokesperson.
Documents published by Building this week reveal the desperate state of Ballast's accounts at the time of the September statement of reassurance. Minutes of a meeting in early September stated that: "Jacobs reminded the board that our current cash position was awful."
The Dutch parent may face a further attack on its finances over bonds it signed to guarantee the provision of construction and facilities management work. On the £88.5m Tower Hamlets PFI schools project, for instance, investment bank Babcock & Brown is likely to go after a bond of guarantee signed by Nedam. A spokesperson gave a hint of the action to come: "There is a guarantee. We'll be looking at the bond."
Deloitte & Touche has had some success in selling parts of Ballast – the northern construction office went to ROK for £2.1m – but the potentially lucrative PFI and facilities management arm has now been shut down after the administrator failed to find a buyer. Just six facility management contracts eventually went up for sale.
The issue of Ballast Services non-sale is likely to come up at the creditors' meeting. A month before going into administration the sale of Ballast Services looked likely: German contractor Bilfinger Berger and outsourcing specialist Mapeley were set to pay up to £11m for the division, and even when Ballast went into administration Bilfinger and Mapeley were still offering £2m. When the Bilfinger deal finally collapsed Deloite & Touche decided to sell the FM contracts on individually.
At the creditors' meeting Deloitte & Touche at least agreed to investigate the action of directors. And creditors' representatives have made it clear that they want the heads of Nedam's bosses as well as Ballast's.
