Administrators of property services firm Connaught say the company would continue to trade while they sold contracts to other providers.
They also said forestry services business Fountains Ltd, which is part of Connaught Environmental, will continue to trade normally on a “profitable and stand-alone basis with the support of its lenders”.
Administrators KPMG are also hopeful the majority of staff will be transferred to other companies but that redundancies would need to be made if alternative providers do not take on staff.
KPMG joint administrator Richard Heis said it was clear that Connaught’s partnerships business was no longer sustainable and had a substantial cash requirement beyond its available lending facilities.
“We will work closely with customers, employees, subcontractors and alternative providers to ensure services are maintained as far as possible and contracts and employees are transferred to alternative providers,” he said.
Connaught Partnerships provides maintenance services to social housing associations and employs around 4,400 staff across the UK.
Meanwhile, another leading corporate recovery specialist Baker Tilly warned that the fate of Connaught sent a strong message to suppliers of the public sector. “We expect more cases to follow,” it said.
Baker Tilly said the impact of government spending cuts on Connaught not only affected the contractor itself but also its subcontractors and suppliers.