ISG Goes Into Administration and is the biggest Collapse since Carillion in 2018

Published on : 25th September, 2024 | Updated on : 28th October, 2024

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Written ByRobert Moore

Marketing Manager

Rob has over a decade of experience in web and general marketing. He has extensive knowledge of the Insolvency sector and has helped many worried directors with their questions.

Rob is now working with the Board at KSA Group Ltd to develop strategic marketing programmes to support the business plan and drive more company rescues.

Robert Moore

Update 28th October

First large casualty of the ISG administration can be seen here https://www.punchline-gloucester.com/articles/aanews/cheltenham-lighting-firm-goes-into-administration

Update 22nd October

Administrators at ISG have discovered that the company owes some £89m to its trade creditors, with 13 subcontractors owed more than £1m each.

“Keith Steven of KSA Group commented, with over £180m of debt owed to trade suppliers, contractors and subcontractors, this will have hit the construction sector hard. Many creditors will experience trading losses as a result. And with recoveries from the administrators and liquidators work expected to be close to zero or zero, this will have a huge impact on creditors.”.

ISG, the construction company and UK Government contractor, has entered administration, making 2,200 workers redundant with immediate effect.

Based on turnover, ISG was the sixth largest construction company in the UK, with revenues of around £2.2bn. Despite this, the firm has faced financial strain for some months and attempts to secure a rescue deal failed.

ISG Chief Executive, Zoe Price, explained the situation had arisen due to ”legacy issues” relating to ”large loss-making contracts” secured between 2018 and 2020.

A notable project ISG completed was the Velodrome for the 2012 Olympics. Most recently, the contractor was working on 69 Government projects – 22 of these for the Ministry of Justice.

A spokesperson of Ministry of Justice said that contingency plans were in place to mitigate the impact of ISGs collapse. Administrators will be worked with, to ”find alternative ways to deliver these projects where necessary”.

As of yet, no administrators have been confirmed as appointed, but rumours are circulating that it will be Ernst & Young.

The last time there was a high-profile collapse in the construction sector was in 2018 with Carillion’s administration. The aftermath of that collapse was lengthy delays in projects and in addition, increased costs. Is the same going to happen for ISGs paused projects?

The collapse of yet another big construction company highlights cracks in the UKs construction industry and certainly raises some questions.

Suzannah Nichol, CEO of Build UK (the sector’s trade body) remarked, ”While there have been changes since Carillion six years ago, there clearly has not been enough change.”

If you are an employee who has just been made redundant, please take a read of our helpful guide here.