Welsh contractor and developer Brunswick Group and Kent builder Cox Brothers, with turnovers of £40m and £17m respectively, have both gone into administrative receivership.
The directors of Brunswick Group asked Barclays Bank to call in administrative receiver Ernst & Young to take charge of 11 of its businesses last Friday.
Cox Brothers, a 158-year-old Maidstone-based builder, went into administrative receivership on Monday.
Brunswick's troubles have led to 120 redundancies in the construction division; 150 jobs have gone at Cox.
The group's financial problems were revealed in the course of a management buyout of the construction division by its managing director Nick Kelly.
A spokesperson for Ernst & Young said: "To some extent this [collapse] was in relation to a buyout. In the light of obligations to creditors and their own responsibilities as directors, Brunswick felt they had no alternative but to ask the bank to call in administrative receivers."
All work on Brunswick's construction sites ceased on Monday. A skeleton staff of 14 has been retained at its head office in St Mellons, Cardiff. It is understood that any joint ventures involving the group are not in receivership.
I’m surprised, with the amount of work it’s got in, that it fell into receivership
Ian Parfitt on Brunswick’s demise
The group's plant hire service continues to trade and Ernst & Young is looking to sell it as a going concern.
The demise of the firms shocked the sector. One rival contractor said: "It's amazing that in a time when order books are so healthy, firms like this have got into so much trouble."
Wales-based industry observers were stunned by Brunswick's collapse. Ian Parfitt, senior partner at project management consultant Richard Parfitt Associates, said: "Brunswick has been an extremely successful, well-respected business. I'm surprised, with the amount of work it's got in, that it fell into receivership."
Projects under way included the first phase of the £70m Westbury Homes development at Century Wharf in Cardiff Bay and three construction contracts at Cardiff Gate Business Park.
Cox Brothers collapsed after its bank, the Royal Bank of Scotland, refused to bail it out any further. Cox Brothers' total debt is thought to be around £1m. Accounts show that its annual pre-tax profit fell from £292,403 in June 1999 to just £94,845 in June 2000.
Fit-out contractor Miletrian has already expressed an interest in taking over the company. Miletrian director Stuart McConnachie said: "It's a sad situation, but the company is a natural fit for us."