Global construction specialist ISG’s six subsidiaries, including ISG Construction, have reportedly filed notices of intent for the appointment of administrators.
Aside from ISG Construction, the other five subsidiaries facing administration are ISG Engineering Services, ISG Retail, ISG UK Retail, ISG Jackson, and ISG Central Services.
ISG Construction, one of the company’s primary divisions, reported a turnover of £544.7m ($724.77m) and a profit of £3.2m for the year ending 2022, Construction News noted.
Notably, ISG Fitout, a highly profitable division of ISG, is not part of the administration filings.
The application for administration comes just before the monthly payroll date, causing uncertainty for employees.
The decision to seek administration follows a period of speculation regarding ISG’s financial stability and the collapse of a potential sale, the report said.
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By GlobalDataThe reasons behind the sales failure are believed to be related to the high costs of refinancing the company, which the prospective buyer was not prepared to meet.
Rumours about ISG’s financial difficulties have been circulating for months, with subcontractors recently halting work and leaving sites unpaid.
Concerns were initially raised at the start of the year, although ISG managed to maintain payments to its supply chain for some time.
The sudden resignations of CEO Matt Blowers and finance director Karen Booth in February further heightened concerns.
“They didn’t contest payment applications like many firms do, they just missed payment runs now and again at first,” a subcontractor told Construction Enquirer.
However, ISG’s management, under the ownership of Texas billionaire William Harrison of Cathexis, promised a “fundamental reset”.
According to Construction Enquirer, around three months ago, Cathexis attempted to dispel concerns by announcing an impending deal with a South African buyer, which was expected to result in a £100m capital injection.
Despite these assurances, the deal did not come to fruition, leaving the company’s future uncertain.
