Crisis contractor Connaught has plunged deeper into trouble after its shares were suspended, following the refusal of additional financial support from its lenders.
The construction and support services outfit has been plagued by problems during 2010, with two chief executives quitting, and its financial director suspended because of suspicious share dealings.
The firm had to issue a profit warning in June, after revealing its revenues would fall £200m due to government spending cuts. Its share price plunged as a result.
Today, there was mounting speculation that Connaught would have to be placed into administration.
It issued a statement to the London Stock Exchange which read:
“On 29 July 2010, Connaught announced that it had agreed the terms of a short term overdraft facility. Since that date Connaught has had continuing discussions with its lenders and other sources of finance with the objective of securing additional funding and a restructuring of the Group's financing for the longer term.
“The Group now believes that the availability of additional funds from its
lenders will not be forthcoming and, whilst it remains in discussions with other parties, the ability to provide an adequate solution to the funding issues the Group faces has become increasingly uncertain.
“Accordingly, pending clarification of the Company's financial position, Connaught has requested a suspension of the trading of its shares on the London Stock Exchange with immediate effect.”
Connaught said a further announcement would be made “in due course”.