Banks 'very likely' to pull plug on Rok
Published: 17 November, 2010
EXETER: Bankers are on the verge of pulling the plug on collapsed social housing contractor Rok because the company's administrators have been unable to arrange a sale of the business, Building magazine reported yesterday.
The administrators initially received more than 100 expressions of interest to buy all or part of Rok, but potential bidders, such as Mears, were dismayed by the state of the business when given a chance to see the books. Contractor Morrison was the first to table a bid on Friday, but interest declined over the week as customers continued to desert the business.
Building reported that Rok's potential turnover has now fallen to the equivalent of just £80m a year following loss of business in recent months, compounded by half its remaining customers walking away since it collapsed.
Remaning bidders were "unable to find a solution" to achieve a sale, and that in the situation the banks are now "very likely to pull the plug" as they are unwilling to continue to fund the business's running costs.
Rok's administrator yesterday announced 1,800 redundancies after efforts to sell Rok subsidiaries, Civil Engineering and Tulloch Transport, failed. Rok bought the two businesses from Tulloch Construction. Tulloch Civil Engineering was rebranded Rok Civil Engineering following the firm's acquisition in 2006.
Alan Brown, joint administrator, said: "Due to a number of economic reasons and as a result of little or no interest in these businesses from prospective purchasers, we have regrettably had to take the decision to close these businesses and make the entire workforce redundant.
"We are continuing to progress the expressions of interest we have received to date for the remainder of the contracts and business in Scotland and would expect to have further updates over the coming days."
Administrators PwC said it still trying to find a buyer for the social housing division and the construction business in England.