Mon, 04 Oct 2021 | ADMINISTRATION
Utilities engineering contractor NMCN has fallen into administration after a failure to sign off its audited accounts led to the collapse of a £24 million refinancing deal. This resulted in liquidity issues which have pushed NMCN Plc and subsidiary NMCN Sustainable Solutions Ltd into administration.
Administrators from Grant Thornton have been appointed and confirmed that they have entered into discussions with the group’s directors and potential acquirers. Other subsidiaries of the group are currently unaffected and are expected to be sold off as part of the administration process in order to settle creditor claims. NMCN says it has received offers to take over subsidiaries as going concerns.
In a statement, NMCN said that it had been working to sign off its accounts and secure the refinancing, but explained: “However, as previously notified, completing the preparation of the group’s accounts has revealed further underlying contractual issues with expected losses rising to £43 million.”
“It has now become apparent that the company will be unable to approve the audited financial statements in a timely manner to allow the Proposed Transaction to complete within the required timeframe.”
“This in turn has led to significant liquidity issues for the Group and particularly the company, which unfortunately is now considered to no longer be able to continue trading as a going concern.”
Regarding the potential disposal of its subsidiaries, NMCN added: “Indicative offers have been received from certain parties for the acquisition of certain of the trading operations and/or subsidiaries of the company on a going concern basis, and discussions are ongoing with further parties which may lead to indicative offers on a similar basis.”
“Following discussions with its advisers, it is expected that this process will be conducted out of administration, to safeguard the continuity of operations and employment, and consequently the consideration receivable by the company is unlikely to result in any value for equity shareholders.”
A spokesperson for administrators Grant Thornton said: “I can confirm we are working with the Directors of the Group and parties who have expressed an interest in the business in an attempt to maximise the position for its employees and creditors. We will provide a further update on these discussions when we are able to.”
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