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Crisis-hit contractor Connaught is desperately trying to raise extra funds to keep the business going, after pressure from suppliers and sub-contractors.
In a statement today, the public sector construction and maintenance specialist said its debt would be “significantly in excess” beyond previously projected levels of £120m at its year end of 31 August 2010, and that it would breach its banking covenants.
Connaught said it had begun negotiations with its lenders to secure additional funding and “these discussions have been constructive”.
It added that it is undertaking a review of its current year trading and the implications this may have on its full year financial performance.
Meanwhile, Connaught has made a series of management appointments.
Stephen Billingham, a former Atkins finance director, has joined the Group “to work on financial and funding matters”.
Roger Wood, the ex-managing director of British Gas Services, is chairing a steering committee responsible for Connaught's operational efficiency programme.
Michael Young, previously corporate affairs director at Centrica, will be advising the Board on communication and reviewing management processes.
Chris Sellers, the group's business development director, will become acting chief executive of Connaught's social housing business.
However, the firm is still without a replacement for chief executive Mark Tincknell, who left the firm last month, and it is unclear who is currently running the northern business, after managing director Peter Jones was suspended last week pending an investigation into share dealing.
Connaught chairman Roy Gardner said: "These are challenging times for Connaught. We are fortunate that we have been able to attract a number of senior and experienced individuals to support the company at this time and we welcome the constructive discussions with our lenders.
“We continue to place great importance on the solid relationship we have built with our supply chain and customers and the continuing support we receive from our employees."
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