Administrators Don’t Expect to Pay ISG Creditors Anything

THE JOINT administrators overseeing ISG’s collapse have confirmed they don’t expect to pay creditors any of the debts they are owed.

Timothy Vance, Alan Hudson and Dan Edkins of Ernst Young, are still working on their proposals for winding up the eight companies making up the international ISG construction giant.

However, they have started writing this month to creditors owed moneys that, “At present, it is not anticipated that there will be any funds available for a distribution to creditors”.

Impact Across Industry

At the beginning of the month, Glenigan assessed the likely impact of the collapse of the UK construction supply chain. This impact is expected to be widespread and significant because of the extent of ISG’s work in the sector.

At the time of the ISG businesses entering into administration on 20 September, ISG worked in public and private sectors across commercial, industrial and housing projects worth over £2.8 billion.

It held 33 awarded contracts, there were 57 live sites with just 3 coming up to completion. Regionally, London will be worst affected with 24 projects under threat – many in the data centre sector – worth £1.8 billion.

The South East has 11 projects in jeopardy worth £779 million, while Wales has 15 projects worth £463 million stalled.

ISG says its failure started when its profit margins and stability suffered during the pandemic, compounded by “legacy” issues leading to losses on some large contracts in the three years preceding the COVID pandemic.

A rescue deal was still being actively explored at the time the company failed, but the investor concerned was reportedly unable to secure sufficient finance with which to turn the company around.

Don’t Expect to Pay ISG Creditors

The joint administrators say that any work or supplies delivered under existing contracts, provided since 20 September, will also not be paid for unless they have expressly ordered it in writing.

Contractors have been advised not to attend sites, which have been closed down, and to arrange collection of any equipment owned by them left at construction sites with the site owners directly.

The administrators are continuing their investigations into ISG’s finances and expect to provide updates in early November.

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